Whether you're new to trading or an experienced trader, you've likely come across the term 'synthetic indices'. The concept of synthetic indices has been a game changer for traders, offering them new opportunities to explore and disrupt traditional trading methods.
In Deriv, we offer synthetic indices under derived indices, which allow you to trade assets derived from simulated markets 24 hours a day, 7 days a week.
What are synthetic indices?
Synthetic indices encompass a wide range of indices which simulate certain real-world market characteristics which have been created by Deriv. Synthetic indices are not tied to any specific underlying market and instead are backed by a cryptographically secure random number generator.
Deriv offers synthetic indices that mimic volatility patterns, crashes, booms, and more. The values and movements of these indices are driven by advanced algorithms rather than external forces.
One of the most distinct advantages of Deriv's synthetic indices is that they are available for trading 24 hours a day, 7 days a week. Now, let’s take a closer look at how this gives traders more flexibility and opportunity.
Advantages of synthetic indices' 24/7 accessibility
Here are 4 key benefits associated with the round-the-clock accessibility of synthetic indices:
How to trade synthetic indices
You can trade synthetic indices on Deriv with CFDs and options.
On Deriv, you can trade synthetic indices on Deriv Trader, Deriv MT5, Deriv X, and Deriv Bot.
Tips for trading synthetic indices
It's important to have a few helpful tips in mind before trading synthetic indices.
- Understand the different types of synthetic indices
There are various synthetic indices, each with unique features and characteristics. Understanding the different types of synthetic indices is essential before you start trading them. Some of the instruments that you can trade on Deriv include crash/boom, range break, drift switch, and volatility indices.
- Use risk management tools
Synthetic indices can be volatile, so using risk management tools like stop loss, take profit, and deal cancellation to protect your capital is vital. Please note that deal cancellation is applicable only when stop loss and take profit are inactive.
- Start with a demo trading account
If you are new to trading synthetic indices, it is best to start with a demo account. This will help you to minimise your risk while you learn how to trade synthetic indices. Try out trading without risk using our free demo account, equipped with 10,000 USD in virtual currency on Deriv.
Synthetic indices are a versatile and flexible trading instrument that can be used by traders of all experience levels. The 24-hour trading availability of synthetic indices differentiates them from conventional indices and provides significant advantages to traders. By breaking free of restrictive trading hours, synthetic indices truly empower traders.
If you are looking for a way to trade the markets around the clock, with more flexibility and control, then synthetic indices may be the right choice for you.
Disclaimer:
The information contained in this blog article is for educational purposes only and is not intended as financial or investment advice.
Deriv X, Deriv Bot, and options trading are not available for clients residing within the EU.
The availability of Deriv MT5 and some synthetic indices may depend on your country of residence.
