Mastering Synthetic Index Trading: Strategies and Insights

Multipliers from Deriv offer a great way of limiting risk and increasing potential profits from your trades. When the market moves in your favour, you’ll multiply your potential profits. If the market moves against your prediction, your losses are limited only to your stake.

Synthetic indices are a type of index that is created by combining data from different sources. The purpose of this article is to assist you in understanding synthetic indices. Deriv also offers other markets like forex, stocks and cryptocurrency and they do not manipulate these either.

Exness has a wide range of trading instruments including CFDs on forex, metals, crypto, energies, stocks, and indices. An example is volatility indices which can only be traded on the MetaTrader 5 platform. The FTSE 100, S&P 500, Dow Jones Industrial Average and many other popular indices in the world are available to trade on Exness.

  • These charts and indicators can be customised according to your trading strategy.
  • Volatility here refers to the degree of variation of price over time.
  • With deal cancellation, you are allowed to reclaim your full stake amount if you cancel your contract within an hour of opening the position.
  • Trading synthetic indices, including volatility indices, is not possible on MetaTrader 4.
  • Synthetic Indices have been traded for over 10 years with a proven track record for reliability are they are still rising in popularity amongst traders the world over.
  • They have a large price movement in a very short space of time.

To do the Deriv real account registration you will need to do login into the Deriv demo account you created in the step above. No other broker can offer these trading instruments because they do not have access to the random number generator and if they did, it would be illegal. Synthetic indices on MT5 can be traded easily just like trading the forex market as they share similarities. Because synthetic indices mirror real-world market movements, the same forex trading tools, and strategies can be applied. On January 15, 2015, the Swiss National Bank decided to abandon the 1.20 peg against the euro. This quickly transformed the currency from a safe haven to one of the riskiest assets and sent the FX markets into chaos.

The jump 10 index has an average of three jumps per hour with uniform volatility of 10%. The Jump 100 index has an average of 3 jumps per hour what moves synthetic indices with uniform volatility of 100%. You will need different accounts within your main Deriv account to trade these different instruments.


Due to the numerous advantages it offers, the kind of trade is quite significant. Anyone can boost their capital if they are aware of some indexing secrets. Recent technology advancements have eliminated the necessity for inexperienced investors to make substantial financial expenditures to enter complicated markets. Making wiser financial choices now and comprehending how the market operates are truest possibilities. This article will take a detailed look on how to trade synthetic indices.

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In other words, synthetic indices behave like real-world markets in terms of volatility and liquidity risks but their movement is not caused by an underlying asset. Synthetic indices are a type of unique trading instruments that are simulated to reflect or mimic (copy) the behaviour of real-world financial markets. As a seasoned Forex trader with over a decade of experience, I have dedicated myself to mastering the intricacies of the financial markets. Over the years, I have honed my analytical skills, staying updated with market trends, economic news, and technical indicators. This in-depth understanding has empowered me to navigate the dynamic nature of Forex trading with confidence. Driven by my passion for trading, I have taken the initiative to share my insights and experiences with others through my engaging blog posts.

Synthetics trades available on Deriv

The Standard account has no commissions, but its liquidity providers apply a markup to the spread of 1 pip above the interbank rate. Comparing this fee to other brokers who offer volatility indices, it is competitive. Exness is authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC) and Financial Conduct Authority (FCA).

how to trade synthetic indices on mt5

Software parameters can be
conveniently managed from a separate window, so there is no need to
specify them in the program code. At least 50 trades are enough to help you decide if a strategy will work for you or not. Within these, there are even more different types of indices eg V10, V25, V75, V75 (1s), V100 (1s) etc. If you start by trying to focus on all of them will leave you distracted. You will not be able to really understand how each index moves. DBot doesn’t require constant monitoring, allowing you to step away from your computer without missing opportunities.

The crash and boom indices are engineered to reflect rising and falling real-world monetary markets. In other words, they behave specifically like a booming or crashing financial market. These indices correspond to simulated markets with constant volatilities of 10%, 25%, 50%, 75%, 100%, 200%, and 300%.Deriv is the only volatility indices broker.

How To Sign Up For A Real Synthetic Indices Account

The random numbers generated will show a spike in the price of the index time and again, just as how a booming market will perform in the real world. Synthetic Indices have been traded for over 10 years with a proven track record for reliability are they are still rising in popularity amongst traders the world over. However, there are still some misconceptions around them and in this post, we will explain what these synthetic indices are and why you should be trading them. You cannot trade synthetic indices on mt4 because you will not find the Deriv servers on the platform. You don’t need large capital to start trading synthetic indices.

how to trade synthetic indices on mt5

On the other hand, using the ‘Close’ button lets you terminate your position at the current price, which can lead to a loss if you close a losing trade. If you purchase a contract with deal cancellation, the ‘Cancel’ button allows you to terminate your contract and get back your full stake. Stop out
With or without a stop loss in place, Deriv will close your position if the market moves against your prediction and your loss reaches the stop-out price. The stop-out price is the price at which your net loss is equal to your stake. All the same, please remember that trading can be addictive and you need to be aware of its risks.

In this section, we are going to look specifically at how you can open a synthetic indices account and then trade synthetic indices on MT5 in six easy steps. You must first register with a broker to be able to open synthetic indices trading account with them. To avoid falling victim to fraudsters before choosing a broker, you must remain vigilant at all times. DTrader allows you to manage your trades in any way you prefer. You can trade synthetic indices with options and multipliers on this platform.

Just set your trading parameters and let the bot do the trading for you. You have the option of simultaneously opening multiple trades too. For example, you can open a Fall (sell) trade on the Volatility Index in 2 hours and a Rise (buy) trade on the same index in 2 minutes. This kind of trade is always available as an equally significant benefit.