HOW TO TRADE STEP INDEX

Volatility, Boom, and Crash indices are all more than one on the Deriv platform, but the Step index is the only standalone synthetic index.

The step index is unique in its design because a price series with a fixed step size of 0.1 has an equal probability of moving up or down.

Before learning how to trade step index, you should understand that it moves differently than other Deriv synthetic indices.

Whatever the movement pattern, it is still consistent with the principles of a trading market structure.

STEP INDEX BROKERS

At the time of writing this article, there is only one broker that offers step index, that broker is Deriv.

Deriv Synthetic step index are designed to mimic real-world market movements.

These indices, which are supported by a cryptographically secure random number generator, are available for trading 24 hours a day, seven days a week, and are unaffected by regular market hours, global events, or market and liquidity risks.

HOW TO TRADE STEP INDEX

how to trade step index

There are fundamentals of trading that will always be consistent with all trading instruments if you pay attention you will see it.

Step index is not excluded; with that in mind this is how to trade step index:

  • Identify the dominant trend
  • Wait for a retracement on a support or resistance zone (use default tools to mark zones)
  • Join the dominant trend on the zone on a lower timeframe with a market structure breakout (chart pattern).

STEP INDEX STRATEGY

There is a proverb that says ‘“If you give a man a fish, you feed him for a day. If you teach a man to fish, you feed him for a lifetime”

Many traders have missed the point of trading, they spend countless hours searching for the ultimate trading strategy, in the case of step index strategy when what they should be focused on it’s the system that births all trading strategies.

Yes, the strategy above all is market structure trading, if you really want to be a master at trading step index, then learning market structure is inevitable.

Market structure covers both long and short-term trading strategies.

With market structure, you can identify order block, support and resistance, dominant trend, retracements, chart patterns, and more.

In conclusion, a good step index strategy is beyond indicators; it is of pure price action on real-time.

STEP INDEX SCALPING STRATEGY

There are three important factors and one Exponential moving average you need for a step index scalping strategy:

  • A trending market on a higher timeframe
  • Wait for consolidation and retracement
  • Market entry on a lower time frame.
  • Exponential moving average 55

A TRENDING MARKET ON A HIGHER TIMEFRAME

step index scalping strategy H1
15 minutes step index scalping strategy

Scalping is more stable In Deriv synthetic indices than convention currency trading because these indices like step index are not affected by global events.

That being said to have a successful step index scalping strategy, first, you must be patient for a trending market on a higher timeframe. (H4, H1, 30M)

WAIT FOR CONSOLIDATION AND RETRACEMENT

After a market trend, the next move will be to wait for a market consolidation and retracement for a trend continuation.

MARKET ENTRY ON A LOWER TIMEFRAME

This is where you place trades, on lower timeframes.

You will identify a market structure here that supports the dominant trend.

This process repeats itself until the market reaches a reversal zone.

Below are images identifying H1 dominant trend and 15 minutes scalping market entry?

STEP INDEX ONE MINUTE STRATEGY

step index 1 minute strategy

This successful one-minute step index strategy am going to reveal to you requires only one exponential moving average and the use of market structure.

  • Exponential moving average 55
  • Find the dominant trend on a higher timeframe (30M and H1)
  • Identify chart pattern market structure on 1M that supports the dominant trend.

WHAT IS THE BEST TIME TO TRADE STEP INDEX?

Step index can be traded at any time as long as it provides a good entry setup. Because step index has constant liquidity, it can be traded at any time.

There will always be a market setup across all timeframes; this setup is consistent because there is no sudden global event that disrupts the organic market trend.

In conclusion, the best time to trade step index is when you identify a clear market setup. This is the best way to trade step index.

To know more about market set up read up market structure.

BEST INDICATOR FOR STEP INDEX

When trading, there are hundreds of indicators to choose from. However, saying that there is one best indicator for step index trading is not ideal because every trader approaches the market differently.

One thing is certain: whatever indicator you use in your trading will always be subject to market structure.

Furthermore, indicators lag and do not provide real-time market prices, which is why they should be used in conjunction with multiple timeframe analysis, market structure, and other standard trading tools such as Fibonacci.

Ultimately, there is no best indicator for step index trading, for the record I use EMA 50 for my entries after market analysis.

STEP INDEX CHART

Step index chart shows the history and real-time prices of step index on the Deriv platform. On the step index chart, you will find all default tools needed for trading.

The step chart like all trading charts has a lower time to higher timeframe and all the default indicators that a trader needs for market analysis.

Step index is available only on MT5.

STEP INDEX TRADINGVIEW

Step index can also be traded on trading view using the web Deriv platform.

The step index trading view on the Deriv platform shows a clear market price staking up or down with multipliers.

All these can be seen on the web version.

See image below:

step index tradingview

STEP INDEX MT4

Step index is not available on MT4, you can trade step index on MT5 and Web view version only in Deriv broker.

STEP INDEX MINIMUM LOT SIZE

Step index moves at a fixed step size of 0.1 and the minimum lot size for step index is 0.1. Volumes less than 0.1 on step index will not work.

Because the minimum lot size of step index is 0.1, you must have the necessary funds to match the step index minimum lot size when trading.

Deriv broker may also review the minimum lot size of any indices in the future if they so desire.

HOW DO YOU ANALYZE STEP INDEX?

To analyze step index you have to start from the higher timeframe to the lower timeframe (top down analysis) this will enable identify the dominant trend to make a trade decision.

HOW DO YOU TRADE FOREX ON DERIV?

Trading on Deriv is easy, all you have to do is open an account and you can start trading Demo or Live (after funding).

CAN I TRADE INDICES ON MT4?

Yes, you can trade indices on MT4 with brokers that offer Indices on MT4.

HOW DO I MAKE A TRADE CHECKLIST?

To create a trade checklist, list a series of principles and trade confirmations to look for before entering a trade.
 
Example of trade checklist;

1) Identify the dominant trend on a higher timeframe
 
2) Wait for a retracement to a previous resistant or support zone
 
3) Join the dominant trend from a lower time frame with a trade confirmation structure pattern when the price reaches support or resistance zone.