Long Wait Is Over! VIX50 Breakout Secret Strategy. Learn to Catch Big Move Market Trend.

A lot of people do not know that Volatility Indices otherwise known as VIX50 or simply V50, can be traded just like Forex on Binary.com (Please note that Binary.com is rebranding to Deriv.com)

Binary.com is mostly known for binary options trading but few people know that they do offer volatility indices that can be traded in the same way you trade your forex pairs.

Volatility indices from binary.com are markets that are simulated. They use randomly generated numbers to reflect the real financial market behavior.

According to binary.com, the random numbers are generated by a computer program. For transparency issues, binary.com is unable to influence or predict which numbers will be generated. In other words, due to broker regulations, binary.com can’t “cheat the market”.

Various Types of Volatility Indices

Everything I will be discussing in this article is as related to Deriv.com.

The types of volatility indices offered are: 10, 25, 50, 75, 100. Recently, 10(1s), 100(1s), Step Index have been added to the Volatility list .

Additionally, there are Boom 500, Crash 500, Boom 1000 and Crash 1000 respectively. And the latest additions in May, 2020 are Range Break Index 100 and Range Break Index 200. These are beautiful instruments that can make you cool cash too when you understand how to trade them. The numbers indicate the level of volatility in the various Indices markets. The volatility 10 index market is the least volatile and the volatility 100 index is the most volatile of these

But many Forex traders are loosing so much investment in this market. Why?

The answers are various, may be low skills, and lack of discipline and poor strategies. Today I want to share with you all the breakout strategy to trade Volatility 50.

Before we start, let us define some key terms used in the VIX50 breakout strategy:

Breakout: A breakout occurs when the price “breaks out” (get it?). some kind of consolidation or trading range.

Pullback: A pullback is a pause or moderate drop in a stock or commodities pricing chart from recent peaks that occur within a continuing uptrend. A pullback is very similar to retracement consolidation, and the terms are sometimes use interchangeably.

Support and Resistance: Support and Resistance. Support occurs when falling prices stop, change direction, and begin to rise. Support is often viewed as a “floor” which is supporting, or holding up, prices. Resistance is a price level where rising prices stop, change direction, and begin to fall.

Usually, in forex trading when we talk to breakout term, this is also accompanied with pullback term. You can not succeed in this market if you are trading forex with breakout strategy without pullback.

As you see on the figure below, we have three indicators on 15min chart:

Support and resistance

Channel

Trend direction

Steps to Enter and Exit the market

First: Check if the channel forms

The channel is formed by two lines: resistance which is yellow line and support which green line. The candlesticks between two lines of channel are appeared green and white according to the color you have chosen. On my chart, they are green and white. If this happens to your chart, means that the market is ranging.

Second: Check for Breakout

Here breakout will appear on resistance or on support of channel. If breakout happens at one of the two lines of channel, the color of candlesticks changes to pink if it breaks on support of the channel and changes to blue if it breaks on support of the channel

Third: Check for an Up or Down arrow

If we have seen a breakout, we must wait for arrow (down or up), this indicates also that the market will soon change trend direction. But a big question comes in mind is that “when to enter in market?”. A good and simple answer is “Wait for Pull Back”

Fourth: Wait for Pull Back

When the market breaks a support going down, there is a time comes back to retest the support to see if the previous support has become a resistance. If the previous support becomes the resistance, this is a real breakout. The same scenario applies on resistance when market wants to go up.

Sometimes, in forex market we need to be sure that the market is reversed or not. In forex market, there is a false breakout where we see a market breaks the support or resistance and after comes back in opposite direction you have taken and you end up make a loss. For trading V50, always wait for a pullback to confirm the real breakout and signal entry

Fifth: When to Take Profit

If you are buying, put the taking profit at the next resistance on chart, and when you selling, put take profit in the next support on chart.

Signals Generation on Charts