BEFORE YOU THINK OF TRADING SYNTHETICS INDICES ON DERIV READ THIS-
Synthetic Indices on Deriv are fully digital financial instruments designed to simulate the price action, structural behavior, and volatility of real-world financial markets. However, unlike traditional Forex currency pairs, commodities, or stock indices, they are not tied to any physical asset or country.
How Do They Work?
Instead of moving based on global supply and demand, geopolitical events, or central bank interest rates, synthetic indices are generated mathematically.
Algorithmic Price Engine: The price action is driven by a cryptographically secure, random number generator (RNG). This algorithm simulates natural market trends, pullbacks, impulses, and consolidations.
Independent of Real-World News: Because the data is purely algorithmic, these markets have zero fundamental noise. A sudden non-farm payroll (NFP) release, inflation report, or political speech will never cause unexpected slippage or gap your positions.
Auditability and Fairness: The underlying code is cryptographically transparent, meaning the price feeds cannot be manually altered or manipulated by the broker on an individual basis.
Key Characteristics of Synthetic Indices
1. 24/7/365 Availability
Traditional financial markets close for the weekend, but because synthetic indices rely on a digital engine rather than centralized banks or global exchanges, they never close. You can trade them on Saturdays, Sundays, and public holidays with identical liquidity.
2. Fixed, Constant Volatility
In standard markets, volatility spikes unpredictably during major news events and dies down during bank holidays. Synthetic indices feature pre-configured, mathematical volatility profiles. For instance, the Volatility 75 Index (V75) maintains a consistent annualized volatility setting of 75%, meaning its average rhythm, velocity, and price swings remain structurally uniform day in and day out.
3. Pure Technical Environment
Because fundamentals are completely removed from the equation, these markets react incredibly cleanly to classic technical analysis. Principles of market structure such as higher highs and higher lows, support and resistance, breaker blocks, and liquidity pools fill the charts in their purest form.