What Are Synthetic Indices? How To Trade them Ebook

Introduction

Part 1

Understanding Synthetic Indices

Chapter 1. What are Synthetic Indices?

Chapter 2. Types of Synthetic Indices

Part 2

How to trade Synthetic Indices

Chapter 3. What’s a tick?

Chapter 4. Options

Chapter 5. Contracts for Difference (CFDs)

Part 3

Trading strategies

Chapter 6. Getting technical

Chapter 7. Technical indicators

Chapter 8. Patterns

Chapter 9. Swing trading and scalping

Chapter 10. Automated trading and bots

Top tips and resources

Chapter 11. Top tips on becoming a better trader

Chapter 12. Tools and resources

Final note

Introduction

Imagine a group of financial markets that never sleep, immune to economic news, political upheavals, and market gaps—where you can trade 24/7/365, yes, even on Christmas Day, with predictable volatility and a diverse range of opportunities to profit from, whether the market is going up, down, or ranging sideways.

Welcome to the world of Synthetic Indices trading, offered exclusively by Deriv, which has been growing in popularity over the last decade. If you’re seeking a controlled, transparent, and consistently active trading environment, then it’s well worth taking the time to learn about Synthetic Indices trading strategies.

In this comprehensive guide, I will explore the range of markets available on Deriv, effective strategies, and risk management practices. I will provide you with valuable insights and actionable tips to elevate your trading success.

Whether you’re a beginner looking to understand the essentials or an advanced trader seeking to refine your approach, I am certain this guide will help you. I’ve traded financial markets for over 37 years and used synthetic products for about 20 years, and it’s my pleasure to share my knowledge to help you avoid mistakes new traders often make. I will draw on my trading experience, using realworld situations, not textbook theories. Many techniques and trading tools covered will also apply to other financial markets, such as Forex, Commodities, Stocks, and Cryptocurrencies; however, Synthetic Indices have unique characteristics, which I will explain in depth as they are the focus of this book.

A closer look at the book

This book has 3 main parts:

Part 1

In this part, I’ll help you understand Synthetic Indices and learn what products are available. We will look at the growing range of Synthetic Indices and the general characteristics of different indices, such as Volatility Indices and Crash/Boom Indices. I will also cover some newer indices, like Drift Switch Indices (DSI) and Step Indices.

Part 2

I will cover the mechanics of placing synthetic trades using both Digital Options and Contracts for Difference (CFDs).1 We will also explore the different platforms on which you can trade Synthetic Indices, including MetaTrader 5 (MT5), cTrader, and Deriv X, which also features TradingView.2

For Options, we will look at Deriv Trader and SmartTrader, and I will tell you about the platforms and products that are best for new traders.3 Whether you prefer trading on a laptop, desktop, mobile device, or a combination, you’ll have many features at your disposal to personalise your Synthetic Indices trading experience. We will also explore Deriv Bot, a unique web-browser trading robot that allows you to auto-trade Options without needing coding skills.4

Part 3

In this part, I reveal actual trading strategies using technical analysis and charting tools. We will also look at copy trading, automated trading, and new developments from Deriv. Just as we don’t all wear the same style or colours, Synthetic Indices are not a one-sizefits-all market. Some traders will prefer fastpaced, short-term trades, while others will opt for longer-term, slower, and steadier markets. I will explain different trading styles, including scalping, range trading, breakout trading, swing trading, and trend trading.

I will also explain the importance of trading psychology, which is often overlooked but plays a significant role in trading success. Staying in control is just as important, so I’ll share money management techniques to help you do that.

Before bringing the book to an end, I will share some top tips to help you become a better trader, along with a glossary of terms and links to useful resources that I personally use. I will also include links to videos where you can learn by watching trades being made.

The aim is to provide you with actionable insights and a practical trading plan without overwhelming you with excessive information or technical jargon.