How To Trade Synthetic Indices: A Comprehensive Guide For 2021

Synthetic Indices are 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 may be interested in trading them.

The aim is to help you in understanding synthetic indices.

This a comprehensive guide. You can use the links below to jump to your preferred section. If you are new to forex you can check out this free introduction to forex trading course for beginners.

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10. Where Can You Trade Synthetic Indices?

You can trade these synthetic indices on various platforms on Deriv.com.

These platforms include DMT5 (Deriv MT5 platform), binary options, Smart Trader, DTrader and the D-bot (which is the Deriv bot that you can tweak according to your trading strategy).

Trading Synthetic Indices on DTrader On Deriv

The DTrader be accessed via Deriv.app on a desktop or a mobile device on a browser.

DTrader allows you to trade directly from the live chart. Deriv provides a continuous price feed for trading Rise (UP) or Fall (Down) as well as other ways to trade a synthetic index.

When you trade synthetic indices on DTrader, there are many digital option trades that you can choose from, and Deriv is always adding more. Below are the current options.

Rise/Fall Options on DTrader

Predict whether the exit spot will be strictly higher or lower than the entry spot at the end of the contract period.

Higher/Lower Options on DTrader

Predict whether the exit spot will be higher or lower than a price target (the barrier) at the end of the contract period.

Matches/Differs Options on DTrader

Predict what number will be the last digit of the last tick of a contract. The duration of this trade cannot exceed 10 ticks.

Over/Under Options on DTrader

Predict whether the last digit of the last tick of a contract will be higher or lower than a specific number. The duration of this trade cannot exceed 10 ticks.

Even/Odd Options on DTrader

Predict whether the last digit of the last tick of a contract will be an even number or an odd number. The duration of this trade cannot exceed 10 ticks.

Touch/No Touch Options on DTrader

Predict whether the market will touch or not touch a target at any time during the contract period.

How To Trade Synthetic Indices on Deriv MT5 (DMT5)

MetaTrader 5 (MT5), developed by MetaQuotes Software, gives Deriv clients access to multiple asset classes — forex, stocks, commodities, and indices — on a single platform. MT5 can be used on Android or iOS mobile devices as well as desktop PC or MAC.

On DMT5 you can do margin trading and CFDs.

Margin trading allows you to make an investment using leverage. Deriv offers up to 1:1000 leverage. This allows you to control a large position than your balance. Leverage magnifies your gains; but it will also magnify your losses.

Contracts for difference (CFDs)

A contract for difference is a contract that gives you the chance to earn a payout by correctly predicting the price movement of assets without owning them.

On DMT5 CFDs give you exposure to a market and allow you to go long (trade for price to go up) or short (trade for price to go down).

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