Getting started with trading Synthetic indices

What are Synthetic Indices?

Synthetic Indices are markets that are simulated. 
They behave like real monetary market however their behaviour is created from the use of randomly generated numbers. 
These arbitrary numbers are produced through a computer program. 
For transparency issues, brokers can't affect or foresee which numbers will be produced and henceforth can't swindle the market. 

On which platform would you be able to trade Synthetic Indices? 

Deriv.com which was fomerly known as Binary.com offers a MT5 Synthetic record, which can be created from the MetaTrader tab. MetaTrader is the most widely used platform for trading a wide variety of assets including indices, currencies, stocks and commodities. The software is licensed to foreign exchange brokers who provide the software to their clients. 

What type of Synthetic indices can you trade?

There are three sorts of Synthetic Indices accessible on MT5, namely:

• Volatility Indices
• Crash Boom Indices
• The Step Index. 

• Volatility Indices

Different Types of Volatility Indices you can exchange on MT5 are: 

1. General volatility indices
2. Volatility (1s) indices
3. High Frequency volatility indices

General volatility indices

These are Volatility 10, Volatility 25,  Volatility 50, Volatility 75 and Volatility 100 index. 

The expansion in number in the Volatility Indices alludes to an increment in instability of the Index with 10 being the least volatile and 100 being the most volatile.

Volatility (1s) indices

These are Volatility 10 (1s),Volatility 25 (1s), Volatility 50 (1s), Volatility75 (1s), Volatility100 (1s) index.

 The volatility (1s) indices update faster than the general volitility indices, that is, they update at the rate of one tick per second.

High Frequency volatility indices

There are only three high frequency volatility indices and these are HF Volatility 10, HF Volatility 50 and HF Volatility 100 index. 

HF Volatility Indices represents High-Frequency Volatility and these move quicker. 

HF Volatility Indices have a pace of two ticks for every subsequent which is to state multiple times the recurrence of all the Volatility Indices aside from the Volatility (1s) Indices and twice as quick as the Volatility (1s) Indices. 

• Crash and Boom indices

The Crash Indices comes in two kinds, the Crash 1000 Index and the Crash 500 Index. 

The Boom Index likewise comes in two sorts, the Boom 500 Index and the Boom 1000 Index. 

For the Boom 500 Index there is on normal 1 spike in the value arrangement each 500 ticks, and for the Boom 1000 arrangement there is on normal 1 spike in the value arrangement each 1000 ticks. 

• The Step Index

The Step Index recreates a market bit by bit. It has an equivalent likelihood of going up or down with a fixed advance of 0.1.

Creating a Synthetic indices account

Create your Synthetic indices account by following this step by step guide 

Step 1

Click here to open Deriv.com 

You need to Login to your account. If you do not have a Deriv account click "Create free demo Account" to create a new account

Step 2

Enter the email account you want to associate with Deriv or sign up with your Facebook or Google account. After clicking on "Create demo account" an email will be sent to activate your account.  

Step 3

Click on the link sent to your email account to activate your account. After it has been successfully activated, enter your country of residence then click next

Step 4

Click on the arrow at the top right corner. You will see a list of the type of accounts that Deriv offers. 

You can start by creating a demo account which is funded with fake money that enables traders to experiment with the trading platform and its various features before deciding to setup a real account funded with the actual money. 

Remember that we want to create a Synthetic indices account so click the "Add" button next to Synthetic

Step 5

Enter the password you will use to access you Demo account then click "Add Account"

Final Step

You are almost done. You need to download the Deriv Meta trader 5 trading platform. On that same window, scroll down to the end of the page and download the Meta Trader 5 trading platform.

The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading… I know this will sound like a cliche, but the single most important reason that people lose money in the financial markets is that they don’t cut their losses short.

- Victor Sperandeo