Understand how Deriv's 24/7 synthetic indices operate, how volatility indices and crash/boom spikes behave, and how to trade them with strict risk controls.
Risk & Affiliate Disclosure:
Signal Lab is an independent educational affiliate and is not owned or operated by Deriv. Trading CFDs, multipliers, and synthetic indices involves a high risk of losing capital rapidly due to leverage. We strongly recommend completing this tutorial and practicing on Deriv's free, unlimited $10,000 virtual demo account before risking real funds.
Lana
Synthetic Market Analyst
3,420 learners
1.5 hours
Free Demo Included
24/7 Trading Powered by Cryptographic RNG
Synthetic indices (also called Derived Indices) are Deriv's flagship trading instruments. Unlike traditional forex or equity markets, synthetic indices are simulated markets driven by cryptographically audited random number generators (RNG). They run 24 hours a day, 7 days a week, 365 days a year — unaffected by real-world geopolitical events, interest rate announcements, or weekend closures.
While this continuous availability provides immense trading flexibility, synthetic indices are fast-moving and can produce severe losses if traded without stop-losses or appropriate margin sizing. This tutorial breaks down every major index category and equips you with practical risk principles.
What You'll Learn
How cryptographic RNG generates transparent, tamper-proof prices 24/7
Differences between Volatility 10, 25, 50, 75, 100, and 1s frequency variants
Mechanics of Boom and Crash indices: steady trends vs sudden price spikes
Trading Jump Indices, Step Indices, and Range Break markets
Differences between trading synthetics on DTrader vs Deriv MT5
Setting automated stop-loss and take-profit orders in high-volatility environments
Interactive Curriculum
Click any lesson below to read
Module 1: Synthetic Foundations
2 lessons • 25 min
Lesson 1: What Are Synthetic Indices & Cryptographic RNG?Reading
Lesson 3: Crash & Boom Indices: Spikes vs Dips ExplainedAvailable
16 min
Lesson 4: Step Indices, Jump Indices & Range Break MarketsAvailable
14 min
Module 3: Platform Execution & Risk
2 lessons • 35 min
Lesson 5: Trading Synthetics on DTrader vs Deriv MT5Available
18 min
Lesson 6: Volatility Management: Stop-Loss & Position SizingAvailable
17 min
Lesson Reader
Lesson 1 of 6
Lesson 1: What Are Synthetic Indices & Cryptographic RNG?
Traditional financial markets are bound by banking hours, central bank decisions, and unexpected economic shocks. Synthetic indices eliminate external news risk by modeling constant market volatility.
Cryptographic Random Number Generation
Deriv uses a verifiable, cryptographically secure random number generator (RNG) audited by independent third-party testing labs. Neither Deriv nor traders can manipulate the generated tick values.
Independent of Real-World News
Earnings reports, inflation numbers (CPI), and war news do not affect synthetic charts. Technical analysis, chart patterns, and price action are purely mathematical.
24/7/365 Liquidity
You can trade on Saturday evening, Christmas morning, or early Sunday before forex markets open. There are no weekend gaps or rollover freezes.
Pro Tip: Because synthetic indices are unaffected by economic news, economic calendars won't help you here. Rely entirely on technical analysis, support/resistance, and candlestick patterns.
Key Takeaway
Synthetic indices provide smooth, uninterrupted market conditions anytime you choose to trade, backed by verified random number generation.
Practice Risk-Free on Deriv Demo
Test this strategy with $10,000 virtual balance on your free Deriv demo account.
Volatility indices represent constant volatility levels: Volatility 10 has constant 10% annual volatility, while Volatility 100 has constant 100% annual volatility.
Standard Volatility Indices (10, 25, 50, 75, 100)
In these indices, 1 tick occurs every 2 seconds. Volatility 75 (V75) is among the most popular and volatile assets on Deriv, famous for rapid momentum swings.
1s High-Frequency Indices (10 (1s), 75 (1s), 100 (1s))
In (1s) variants, 1 tick is generated every single second. Price moves twice as fast as the standard indices, making them popular among scalpers and automated bots.
Risk Alert: Volatility 75 and Volatility 100 move extremely fast. Trading large lot sizes on V75 without a stop-loss can wipe out an account in minutes. Always use the smallest lot size (0.001 on V75 MT5) when starting.
Key Takeaway
Higher index numbers mean higher volatility. Match the index to your risk appetite: start with Volatility 10 or 25 before attempting V75 or V100.
Lesson 3: Crash & Boom Indices: Spikes vs Dips Explained
Crash and Boom indices simulate sudden market crashes and sudden upward market booms at average statistical intervals.
Boom 500 and Boom 1000
On Boom indices, the price slowly ticks downward in small regular steps, punctuated by sudden massive upward price spikes. On Boom 1000, a spike occurs on average once every 1,000 ticks.
Crash 500 and Crash 1000
On Crash indices, the price slowly grinds upward in small regular steps, punctuated by sudden steep downward crashes. On Crash 500, a drop occurs on average once every 500 ticks.
Spike Slippage Reality
Because spikes occur within a fraction of a second across multiple points, regular stop-losses can experience slippage if a spike gaps directly past your order line.
Pro Tip: Catching spikes with small stakes and a defined limit offers asymmetric upside, but scalping against the spike ('tick collecting') carries extreme catastrophic risk.
Key Takeaway
Never risk large capital trying to scalp tiny ticks against the natural spike direction on Crash/Boom.
Practice Risk-Free on Deriv Demo
Test this strategy with $10,000 virtual balance on your free Deriv demo account.
Lesson 4: Step Indices, Jump Indices & Range Break Markets
Beyond volatility and crash/boom, Deriv provides specialized mathematical markets designed for diverse trading styles.
Step Index
The Step Index moves in equal predetermined steps of 0.1 points with an equal 50% statistical probability of moving up or down. This creates clean stair-step candlestick formations ideal for breakout strategies.
Jump Indices
Jump indices simulate market jumps with constant volatility, where an unexpected price jump occurs on average once every 20 minutes (Jump 10, 25, 50, etc.).
Range Break Indices
These indices fluctuate between support and resistance boundaries until a breakout occurs on average after 100 or 200 attempts.
Pro Tip: Step Index is popular among technical traders because chart support and resistance zones form with high mathematical clarity.
Key Takeaway
Explore multiple synthetic instruments on demo to find the price movement rhythm that best suits your temperament.
Lesson 5: Trading Synthetics on DTrader vs Deriv MT5
Deriv allows you to trade synthetic indices across multiple interfaces, each with distinct advantages.
DTrader (Options & Multipliers)
Web-based and simple. You can trade Multipliers (which cap your maximum risk to your initial stake while providing 100x+ leverage upside) or Rise/Fall digital options with fixed payouts.
Deriv MT5 (CFDs & Flexible Lot Sizes)
Industry-standard MetaTrader 5 desktop and mobile terminal. Provides advanced multi-timeframe charting, custom indicators, expert advisors (EAs), and precise pip/point calculations.
Deriv GO (Mobile App)
Designed for fast on-the-go trading of Multipliers with integrated stop-loss and take-profit sliders.
Pro Tip: If you are new, start on DTrader with Multipliers: you enjoy magnified upside, but you can NEVER lose more than your initial stake even in severe market gaps.
Key Takeaway
Use DTrader Multipliers for risk-capped trading and Deriv MT5 for technical chart analysis and multi-chart monitoring.
Lesson 6: Volatility Management: Stop-Loss & Position Sizing
Because synthetic indices run 24 hours without pauses, disciplined risk control is the single factor that separates surviving traders from blown accounts.
1. Minimum Lot Sizes
On Deriv MT5, always start with the asset's minimum lot size (e.g. 0.001 on Volatility 75, 0.20 on Boom 1000). Never increase lot size until your win rate is proven on demo.
2. Pre-Determined Stop-Loss
Always set your Stop-Loss at the moment of order entry. Never tell yourself 'I will close it manually' — synthetic momentum can move 50 points in seconds.
3. The 1% Account Risk Cap
Never risk more than 1% of your total account balance on any single synthetic trade. If your account has $500, your maximum loss on a trade must not exceed $5.
Risk Alert: Never hold open unhedged synthetic positions overnight without guaranteed stop-losses. 24/7 price action means drawdowns can occur while you sleep.
Key Takeaway
Longevity in synthetic trading requires prioritizing defense over aggression. Trade small, protect capital, and let compounding do the heavy lifting.
Practice Risk-Free on Deriv Demo
Test this strategy with $10,000 virtual balance on your free Deriv demo account.
Deriv uses an independently audited, tamper-proof algorithm.
No. Deriv synthetic indices are generated by cryptographically secure random number generators (RNG) that are regularly audited by independent third-party testing agencies (like BMM Testlabs). Neither the broker nor individual traders can alter the pricing sequence.
Open 24/7/365
Trade any day, any hour, with no weekend closures.
Yes! Because synthetic indices simulate continuous mathematical volatility rather than physical asset supply and demand, the markets never close for weekends, national holidays, or bank holidays.
Negative Balance Protection
Deriv protects accounts from owing debt.
Deriv provides negative balance protection on retail accounts. If a sudden gap causes a loss exceeding your account balance, your balance is reset to zero. Furthermore, when trading Multipliers on DTrader, your maximum loss is strictly capped at your initial stake.
Start with Lower Volatility
Volatility 10 or Volatility 25 are best for new traders.
We strongly recommend beginning on Volatility 10 or Volatility 25. These instruments move at a measured pace, allowing beginners to practice placing stop-losses, reading candlestick patterns, and observing indicators without the extreme speed of Volatility 75.
Leverage with Zero Extra Downside
Magnify your returns while capping risk to your stake.
Multipliers allow you to multiply potential gains by factors up to x100, x200, or x500. If the market moves in your favor, profits multiply. If the market moves against you, your position automatically closes if loss reaches your initial stake — you can never lose a penny more than you put in.
