Comprehensive Guide To Step Index Trading (2024)

Characteristics of the Step Indices

1. Equal Probability: Step Indices have an equal probability of moving up or down, providing a balanced trading environment.
2. Fixed Step Size: They move in predetermined step sizes, such as 0.2 for Step Index 200 and 0.5 for Step Index 500.
3. Consistent Movements: The fixed increments create predictable and steady price changes, aiding in precise market analysis.
4. 24/7 Trading: Available for trading around the clock, offering flexibility for traders in different time zones.

These features make Step Indices suitable for various trading strategies, including trend following and range trading.

How To Open an Account

Opening a synthetic indices trading account with Deriv is a straightforward process. Follow these steps to get started:

Step 1: Visit the Deriv Website:
Go to the official Deriv MT5 sign-up page here.

Step 2: Sign Up

Click on the ‘Create free demo account' button on the page.
You can sign up using your email address, or you can use your Google or Facebook account for quicker registration.

Agree to the terms and conditions and click ‘Create free demo account‘.

Step 3: Verify Your Email:
After signing up, you will receive a verification email. Click on the link in the email to verify your address.

Step 4: Complete Your Profile:
Once your email is verified, log in to your new account and complete your profile by providing the required personal information, such as your name, date of birth, and address. 

Also set your preffered account base currency.

Step 5: Verify Your Identity
For security purposes, Deriv requires you to upload documents to verify your identity and address. This could include a government-issued ID (like a passport or driver’s license) and a utility bill or bank statement. You can choose to verify the account later if you donty have the document at hand.

Get step by step instructions on how to verify a Deriv account here.

Step 6: Open a Synthetic Indices Account
Click on the (1) ”Trader's Hub option” on the top left of your dashboard. Then click (2) ‘Real‘ > (3) ‘CFD's‘.

Then choose the Deriv Standard Account. This account gives you access to synthetic indices and forex CFD's.

Choose the jurisdiction for your account.

Afterward, you will be prompted to set a password specifically for your real Deriv MT5 synthetic indices account. This password is exclusively for logging into your trading account on Deriv MT5 and is separate from your main Deriv account password.

After creating your account you will be prompted to transfer funds from your main Deriv account to your DMT5 synthetic indices account.

Step 7: Download MT5 & login

After completing Deriv real account registration mt5 you will now see the Deriv synthetic account listed with your login ID.

You will also get an email with your login ID that you will use to log in to the Deriv synthetic account.

Download the mt5 application for your device and log in.

Step 8: Start Trading
Once your account is funded, you can start trading synthetic indices. Access the trading platform, select your preferred synthetic index, and begin trading.

You can get step by step instructions on how to open a synthetic indices account here.

You can get step by step instructions on how to open a synthetic indices account here.

Pros of Trading Step Indices:

1. High Volatility: Step indices like Step 500 experience significant price movements, providing opportunities for quick profits.

2. Availability: Step indices are available for trading 24/7, allowing flexibility in trading times compared to traditional markets.

3. No Market Influence: They are synthetic indices not influenced by external market factors, such as economic data or geopolitical events, which can provide a more stable trading environment.

4. Short-term Trading: Suited for traders who prefer short-term trading strategies due to their high volatility

Cons of Trading Step Indices:

1. High Risk: Due to their volatility, trading Step indices carries high risk. Prices can move sharply against traders, leading to substantial losses.

2. Artificial Nature: Since these indices are synthetic and not based on real market conditions, trading strategies used in traditional markets may not always apply effectively.

3. Emotional Impact: Rapid price movements and potential for quick gains or losses can lead to emotional trading decisions, which may undermine trading discipline.