Trade Volatility Indices, Crash Boom Indices & more on MT5
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Deriv Synthetic Indices on MT5 Review
Synthetic Indices are simulated markets that can be traded 24/7. They come in different types, simulating different kinds of market conditions, including volatility (for example Volatility Indices) and falling and rising markets (Crash Boom Indices). Deriv offers a wide range of these Indices to trade on MetaTrader 5 (MT5).
This review will talk the trader through the types of Synthetic Indices offered by Deriv as well as analyse factors related to trading them on MT5. It is a feature of Deriv that they innovate, so the offering of MT5 Synthetic Indices changes over time, however, this review is kept updated and tracks these updates. Over time, the tendency has been to increase the overall offering and the offering within types of Indices.
The trader can open a Synthetic Indices MT5 trading account from the 'Trader's Hub' on the Deriv platform, and see for themselves. Deriv was offering its Synthetic Indices in an account called the Derived account, separate from its CFDs on markets such as Forex and Metals. However these are being combined into one account, called the Standard account.
So the trader can trade Synthetic Indices alongside markets like Forex, Indices, Energy, Crypto, ETFs, Stocks, and Metals CFDs. If the trader wishes to start by signing up with Deriv they can do so here: Deriv Sign-Up.
What is Deriv MT5 ?
The trader may well be familiar with MetaTrader 5 (MT5) or MT4, but some might not be, and may be curious about its features. MT5 is a third-party platform made by MetaQuotes Software. Traders can use it through CFD brokers (like Deriv) that can offer features specific to the broker. MT5 is the successor to MT4, expanding on the core features that helped make MT4 successful. These can be described as the capacity to customise, a large online community and marketplace, as well as the ability to trade without and with robots.
Robots are features of MT4 and MT5 and are known as Expert Advisors (EAs for short). EAs can do several functions, but their principle use is as online trading robots. That is, the trader can automate the application of a trading strategy. Robots may be supplied on the platform, but they can also be downloaded, normally for a fee. MT5 differs from MT4 in several ways including that it uses a different programming language from MT4 (MQL5 vs MQL4), for those who want to make or modify robots.
The trader may also make technical indicators using MQL5, and download them. However, for those who do not want to do so, technical indicators are supplied with the platform. MT5 is described as a multi-asset platform, which also differs to a significant extent from MT4. Different brokers will provide MT5 with different features, such as available trading markets. Deriv offers a wide range of CFDs on MT5, particularly including Synthetics. A good way to get to grips with Deriv MT5 is to try it on a demo account first.
| Feature | Description |
|---|---|
| Synthetic Indices Trading Type | MT5 offers a wide range of Synthetic Indices, including Volatility and Crash/Boom Indices. Synthetic Indices simulate different types of market conditions, such as different levels of volatility and rising, falling, and ranging markets, that the trader can select Description |
| Margin Trading Account Feature | On MT5, Synthetic Indices are offered to trade on margin with leverage up to 1000:1 and trade sizes down to 0.001 lots, on selected markets Description |
| Minimum Deposit Account Feature | MT5 accounts are created from the main Deriv account. There is no minimum deposit to move funds into an MT5 account from the main Deriv account and a $5 minimum deposit to fund the Deriv account. Demo MT5 accounts can be created as well Description |
| 24/7 Trading Platform Feature | Traders may trade Synthetic Indices 24/7 as they are simulated markets and not based on real markets but on algorithms Description |
What is the difference between Synthetic and Volatility Indices ?
The trader may be familiar with Volatility Indices, which aim to track volatility. However what Deriv is offering are Synthetics, that is, they are not based on real markets but on mathematical models that work to simulate volatility, and which are independently audited.
Deriv Volatility Indices allows the trader to select markets with constant volatility, expressed as a percentage number. The Index fluctuates with this selected, constant volatility level. This differs from real markets where the volatility levels can fluctuate, including spiking and times of reduced volatility.
The core offering of Synthetics at Deriv was and is still arguably Volatility Indices, but the types of markets being simulated have increased (i.e. they simulate market conditions other than volatility). Thus, Synthetic Indices are a broader class of simulated markets and contain Volatility Indices.
There are ten types of Synthetic Indices available on MT5: Volatility Indices, Crash Boom Indices, Hybrid Indices, Step Indices, Multi Step Indices, Skew Step Indices, Range Break Indices, DEX Indices, Drift Switching Indices and Jump Indices. There are also generally more types of Synthetic Indices on MT5 compared with the other platforms offered on Deriv.
On Deriv MT5, Volatility 10, Volatility 10 (1s), Volatility 25, Volatility 25 (1s), Volatility 50, Volatility 50 (1s), Volatility 75, Volatility 75 (1s), Volatility 100 and Volatility 100 (1s), Volatility 150 (1s), Volatility 200 (1s), Volatility 250 (1s) and Volatility 300 (1s) Indices are offered.
The Volatility (1s) Indices update faster, that is, one tick every second, versus one tick every two seconds for the other Indices (ticks are each minimum move of the Index). The increase in number in the Volatility Indices refers to an increase in constant volatility of the Index, i.e., Volatility 10 has 10% constant volatility, while Volatility 75 has 75% constant volatility. Thus, it can be seen that MT5 provides a wide range of choices in terms of Volatility Indices.
To access these and all markets available from an MT5 account, the trader may wish to click on the MT5 Symbol tab (or press Control+U on desktop). This brings up all markets on the platform, which the trader can then select to appear on their Symbol list.
What other Synthetic Indices are available on MT5 ?
There is a wide range available in addition to Volatility Indices, which has increased over time. Let's start with the Crash Boom Indices. These come in two types (Boom or Crash). As the name suggests these simulate rising and falling markets.
The Crash Indices come in five types, the Crash 300 Index, the Crash 500 Index, the Crash 600 Index, the Crash 900 Index, and the Crash 1000 Index. The Crash 300, Crash 500, Crash 600, Crash 900, and Crash 1000 Indices have on average one drop in the price series every 300, 500, 600, 900, or 1000 ticks.
The Boom Index also comes in three types, the Boom 300 Index, the Boom 500 Index, the Boom 600 Index, the Boom 900 Index, and the Boom 1000 Index. Likewise, the Boom 300, Boom 500, Boom 600, Boom 900, and Boom 1000 Indices, have on average one spike in the price series every 300, 500, 600, 900, or 1000 ticks.
The Hybrid Indices
The Hybrid Indices are a hybrid of Volatility and Crash/Boom Indices, i.e., they are Crash/Boom Indices with selectable volatility levels. They are offered as Vol over Crash 400, Vol over Boom 400, Vol over Crash 500 and Vol over Boom 500 and Vol over Crash 750 and Vol over Boom 750, each with 20% volatility.
What are the Step Indices ?
The Step Indices simulate a market step by step. They have an equal probability of going up or down with a fixed step of 0.1 (Step Index), 0.2 (Step Index 200), 0.3 (Step Index 300), 0.4 (Step Index 400) or 0.5 (Step Index 500). The idea of the Step Index is to smooth out jumps in price action.
The Multi Step Indices
The Multi Step Indices are a type of Step Index that does not have a fixed step size. They have an equal probability of going up and down with each step and come in two types. The Multi Step 2 Index has two different step sizes while the Multi Step 4 Index has four different step sizes.
Skew Step Indices
The Skew Step Indices skew the probability, unlike the other Step Indices. The Skew Step Index 5 Up is skewed to a 90% probability of going up gradually but with a 10% probability of a sharp drop. The Skew Step Index 5 Down, is the reverse, with a 90% chance of a gradual drop and a 10% chance of a sharp rise. The Skew Step 4 Indices reduce the skew: the Skew Step Index 4 Up has an 80% chance of a gradual rise, but a 20% chance of a sharp drop, while the Skew Step Index 4 Down has an 80% chance of a gradual drop and a 20% chance of a sharp rise.
What are the Range Break Indices ?
The Range Break Indices break the range the Index moves in either once every 200 attempts on average (the Range Break 200 Index) or once every 100 attempts on average (the Range Break 100 Index). Therefore they can be seen as simulating range breaks in trading (i.e. breakouts from support/resistance patterns).
What are the Jump Indices ?
The Jump Indices have five types. These are the Jump 10 Index, the Jump 25 Index, the Jump 50 Index, the Jump 75 Index, and the Jump 100 Index. Each Jump Index has three jumps per hour. The figure (10, 25, 50, 75, or 100) refers to the volatility of the Index.
What are the DEX Indices ?
The DEX Indices aim to simulate the way markets may respond to market conditions such as volatility around news trading events. News events are releases of data into the market that can cause volatile spikes or drops, and which are surrounded by volatility. In essence, there are frequent small drops or jumps but on average a major spike or drop every 600, 900, or 1500 seconds, but let's break it down.
The DEX Indices come in six types. The DEX 600 UP, the DEX 900 UP and the DEX 1500 UP Indices have small drops and a major spike on average every 600, 900 or 1500 seconds. The DEX 600 DOWN, DEX 900 DOWN and DEX 1500 DOWN Indices have small spikes and a major drop on average every 600, 900 or 1500 seconds.
What are the Drift Switching Indices ?
The Drift Switching Indices simulate action around trends. They have three phases: upwards, downwards, and sideways. The Indices switch between these phases on average every 10, 20, or 30 minutes, and thus come in three types: Drift Switch 10, Drift Switch 20 and Drift Switch 30.
Real vs Demo Account
While the trader can create a Real account, they may also create Demo accounts. These can be used to test out these Indices and try out ideas and strategies, without risking real money. The MT5 Demo accounts can be created from the Trader's Hub, by selecting 'Demo' from the drop-down menu directly beside the 'Trader's Hub' label. Deriv Demo.
Basket Indices
Basket Indices are available alongside Synthetic Indices but they are not Synthetic Indices and cannot be traded at weekends. They may, however, be traded around the clock from Monday to Friday (except Gold, which has an hour's break each day). Basket Indices are CFDs on currencies or metals (Gold) versus an equally weighted basket of other currencies.
Derived Indices
The Derived Indices are Forex Indices which are based on real markets but with a volatility of 10%. The idea is to provide market-based value but insulated to some extent from real-world events. They can be traded 24 hours from Monday to Friday.
Where to find the MT5 account on Deriv
The MT5 account and the platform are available from the Trader's Hub tab on Deriv. Some countries may have restrictions on trading Synthetic Indices on MT5, features are subject to change and maximum leverage available can be significantly lower in some regions.
| Broker, Feature & Trading | Description |
|---|---|
| Deriv Broker | Deriv is the rebranding of Binary.com and offers Binary.com's platforms (and more) in a user-friendly interface. Binary.com has moved to Deriv What Is Deriv |
| Deriv Synthetic Indices Feature | MT5 Synthetic Indices trading is available on Deriv on the MT5 account and the trader may trade Synthetic Indices on the MT5 web trader, on MT5 desktop download and on MT5 mobile as well as on Deriv's other platforms like Deriv X Where To Trade Synthetic Indices |
| Trade Synthetic Indices Trading | The trader can open an MT5 account from the Trader's Hub on the Deriv Platform after they have signed up to Deriv How To Open A Synthetic Indices Account |
Deriv offers Synthetic Indices on a wide range of platforms
As well as MT5, Deriv features Deriv Trader, which is a user-friendly platform, Deriv Bot, which lets the trader build trading robots, and cTrader, SmartTrader, Deriv X and Deriv GO. Synthetic Indices may be traded on all these platforms, however trading Synthetic Indices with leverage is offered only on some of these, including MT5.
What MT5 platforms are available ?
MT5 is available as a desktop download, a web trader and as a mobile app. The trader can trade via the MT5 account on a web trader and also download MT5 desktop and mobile via the 'Trader's Hub' and trade Synthetic Indices on these platforms. Desktop MT5 has more features than the web trader (however the web trader is arguably clear and user-friendly). MT5 mobile is a well-designed, user-friendly mobile trading app (with some distinctive features).
Is there a commission charge ?
There is no commission charge to trade Synthetic Indices. For overnight positions, a swap rate is charged.
Are spreads fixed or variable ?
It depends on the Synthetic Index. Many are fixed, however, the Crash Boom, Hybrid, Jump, DEX and Drift Switching Indices have floating (variable) spreads.
| Synthetic Index | What Is It |
|---|---|
| Volatility Indices Synthetic Index | Volatility Indices simulate different levels of market volatility and come in Volatility 10, 25, 50, 75 and 100 Indices and also as (1s) versions, which update faster (the (1s) versions also include Volatility 150, Volatility 200, Volatility 250 and Volatility 300 Indices) What Is It |
| Jump Indices Synthetic Index | The Jump Indices have different volatility (Jump 10, Jump 25, Jump 50, Jump 75 and Jump 100 Indices) but each jumps three times per hour What Is It |
| Crash Boom Indices Synthetic Index | Crash Boom Indices simulate crashing or booming markets and come in Crash 300, Boom 300, Crash 500, Boom 500, Crash 600, Boom 600, Crash 900, Boom 900 and Crash 1000, Boom 1000 types What Is It |
| Hybrid Indices Synthetic Index | The Hybrid Indixes are Crash/Boom Indices with a fixed 20% volatility level: Vol over 400 Boom, Vol over 400 Crash, Vol over 550 Boom, Vol over 550 Crash, Vol over 750 Boom and Vol over 750 Crash What Is It |
| Step Indices Synthetic Index | The Step Index simulates a market step by step, with each tick having an equal probability of being up or down and come in five types with different fixed steps: Step Index, Step Index 200, Step Index 300, Step Index 400 and Step Index 500 What Is It |
| Multi Step Indices Synthetic Index | The Step Index simulates a market step by step, with each tick having an equal probability of being up or down but with different step sizes: Multi Step 2 Index (2 step sizes) and Multi Step 4 Index (4 step sizes) What Is It |
| Skew Step Indices Synthetic Index | The Skew Step Index simulates a market step by step, but with different (skewed) probabilities of going up or down: Skew Step 4 Up, Skew Step 4 Down, Skew Step 5 Up and Skew Step 5 Down What Is It |
| Range Break Indices Synthetic Index | The Range Break Indices break the range the market moves in once on average either every 100 attempts (the Range Break 100 Index) or once every 200 attempts (the Range Break 200 Index) What Is It |
| DEX Indices Synthetic Index | The DEX Indices simulate a market reacting to news events. The DEX 600 UP, DEX 900 UP, and DEX 1500 UP Indices have small, frequent drops and major spikes up on average every 600, 900, or 1500 seconds while the DEX 600 DOWN, DEX 900 DOWN, and DEX 1500 DOWN Indices have small, frequent spikes and major drops on average every 600, 900 or 1500 seconds What Is It |
| Drift Switching Indices Synthetic Index | The Drift Switching Indices simulate trends, switching between upwards, downwards, and sideways movement on average every 10 minutes (Drift Switch 10), 20 minutes (Drift Switch 20) or 30 minutes (Drift Switch 30) What Is It |
What order execution is available ?
Order execution is market execution, thus there are no requotes.
What is it like to trade Synthetic Indices ?
They are similar to trading any market, in that the trader is trading on movements on a chart on a trading platform and can use trading tools to analyse these markets. One difference is that the trader may select characteristics of these markets such as volatility, or simulate 'Booming' or 'Crashing' markets, which is not possible with real markets.
However these are simulated, not real markets, and characteristics of real markets may be different or absent from these Indices. It is also the case that selecting a type of market condition may not make it any easier to trade, so the trader still needs to do their analysis and work out a trading plan, as with all trading.
Synthetic Indices aim to simulate trading markets, so they will exhibit characteristics that can make trading difficult, even though they allow the trader to focus on or select a type of market condition. However, MT5 has a wide range of trading tools and also lets the trader download additional technical indicators (or even build them).
In essence, it is trading that hones in on patterns that can occur in the real market, but are simulated. This may allow the trader to try out various strategies, knowing at least that the pattern will tend to occur. Bear in mind that Deriv has now combined markets such as Forex and Metals CFDs and Synthetics CFDs into one account, so the trader will be able to trade both types of markets from one account.
Expert Advisors
On the MT5 desktop download, the trader can find Expert Advisors (EAs) from the Navigator window. These are online trading robots that will execute trading strategies on behalf of the trader, for example, based on indicator signals. There are several pre-built EAs provided on MT5. EAs may run 24/7 but can also create losses rapidly in the trader's account.
What is the minimum deposit ?
The trader first creates a Deriv account in a chosen currency. From the Trader's Hub, the MT5 account is created to trade Synthetic Indices on MT5. This is in USD. So the trader funds their USD MT5 account from (and withdraws to) their base account. There is no minimum deposit to fund MT5, but there is a minimum of $5 which can be sent from payment providers to fund the fiat account.
The maximum deposit varies depending on the payment method, for example, the maximum deposit by credit/debit card is $10,000. If traders wish to deposit larger sums, then Bank Transfer allows a maximum deposit of $100,000. The minimum withdrawal is $5 but can vary depending on the payment method.
If the trader wishes to try Deriv, they may create a Deriv account. Deriv.
Analysing Synthetic Indices
MT5 has a range of tools for analysing the market including technical indicators. Technical indicators were designed for real markets, however, they can be used to analyse Synthetic markets. As with any market, analytical tools do not predict but may provide a basis for making a trade. The Indices form patterns as well, providing another basis for analysing these markets.
The trader can use chart price types such as candlestick charts if they wish, and thus use a wide range of analysis techniques based on these, such as candlestick chart analysis. MT5 has an expanded range of tools compared with the basic MT4, including more inbuilt technical indicators, graphical objects, and time frames.
What is the minimum trade size ?
This varies depending on the Index. The minimum trade size is 0.001 lots which is offered for the Volatility 75 Index. Other Indices offer higher minimum trade sizes.
Deriv X
Deriv X is a user-friendly platform that offers an account for trading Synthetic Indices on margin. Deriv X has a similar set of Synthetic Indices as those offered on MT5. Deriv X is available from the Trader's Hub on the Deriv platform (like MT5).
What is the maximum leverage ?
The maximum leverage is 1000:1, meaning the trader can trade with smaller account sizes if they wish, especially given the minimum trade size available. Increasing leverage increases risk, but the trader can reduce their exposure by lowering the order size.
What times can the trader trade these markets ?
The Volatility, Crash Boom, Hybrid, Jump, Range Break, DEX, Drift Switching Indices, Step and Multi Step Indices can be traded continuously, 24/7.
Payment Methods
Deriv offers a wide range of payment methods, but availability depends on the trader's region. These can include Wire Transfer, Credit/Debit Cards, Neteller, Skrill, Jeton, EPS, Giropay, Przelewy24, Rapid Transfer, FasaPay, Perfect Money, WebMoney, Paysafecard, STICPAY, Airtm, Boleto, Pay Livre, Trustly, 1ForYou, Volet (formerly Advcash), Paytrust, Help2Pay, DragonPhoenix, ZingPay, Ngan Luong, Changelly, Banxa, Xanpool and Deriv P2P.
Which methods are available can be seen from the 'Cashier' tab. In some regions, Crypto is available as well for deposits and withdrawals and accounts are offered denominated in Cryptos or fiat. Crypto accounts have no minimum deposit. Withdrawal requests are normally processed within 24 hours and can be faster than this.
Comparative analysis of Deriv MT5
MT5 provides the potential to trade Synthetic Indices on a platform that offers a wide range of capabilities. On desktop, MT5 provides both self-directed trading and trading with robots called Expert Advisors (EAs). On its web trader and mobile app, MT5 offers clear, user-friendly ways to make and monitor trades. MT5 has an online marketplace behind it, offering additional tools, including EAs and technical indicators. MT5 is the current release of MetaTrader, superseding MT4 and offering several improvements on this platform.
Deriv also offers Synthetics on cTrader, another third-party platform with advanced features. cTrader, like MT5, offers the capacity to use robots and has an arguably user-friendly desktop interface. Deriv X also offers a wide range of Synthetics, but it does not have as wide a range of capabilities as MT5.
Deriv can be seen as distinctive compared with other Forex brokers, in that it provides CFDs on simulated markets (Synthetics) and real markets (like Forex). For those who want to trade Synthetics, Deriv provides a wide range of platforms and a wide range of Indices, simulating different market conditions.
Summary
Synthetic Indices offer a way to trade simulated markets and are available 24/7. The trader can find a wide range of Synthetic Indices on Deriv MetaTrader 5, allowing the trader to trade these markets using the tools offered by this advanced, multi-asset trading platform.
At Deriv, the trader may trade Synthetic Indices on an MT5 web trader, MT5 desktop, or user-friendly MT5 mobile. The trader can use the analysis tools provided on the platform, with the caveat that these are not real markets.
There is a $5 minimum deposit for a live account, maximum leverage is 1000:1 (increasing leverage increases risk) and low minimum trade sizes are available on selected Indices, letting the trader reduce their exposure. The trader may create a demo account to practice trading and try out ideas and the Indices themselves.
