As more traders become aware of synthetic indices, queries such as “what is the best time to trade synthetic indices” continue to arise, which is why I have compiled a comprehensive answer that applies to all synthetic indices trading instruments.
Anyone who has been in the trading business for a long time understands the importance of timing, which is governed by market hours and sessions.
As a result, traders have evolved different trading methods that best suit the trading time and session.
It will be worth your time to read through if you are patient.
Table of Contents
HOW TO TRADE SYNTHETIC INDICES
If you are new to synthetic trading and you find yourself here, then you are in good hands because here you will find many robust articles on how to trade synthetic indices.
(Boom and crash and volatility indices)
To begin with, synthetic indices are quite different from forex in many ways as I have mentioned in my previous articles so allow me to show you a proven way how to trade synthetic indices.
It will surprise you to know that to trade synthetic indices successfully you need only one thing and that is the knowledge of market structure.
You need it because across all time frames in synthetic indices one thing that is constant is the formation of these market structures across all time frames, this is also possible because of the constant volatility synthetic indices are designed with by Deriv.
In this market structure, you will find support and resistance zones, chart patterns, and more.
In chart patterns, you will find M and W reversal patterns, continuation patterns, and more.
For more clarity, you will find below images on how to trade synthetic indices with market structure patterns across all timeframes.
WHAT IS THE BEST TIME TO TRADE SYNTHETIC INDICES
Synthetic indices can be traded at any time because of the constant volatility. Another good time to trade synthetic indices is after a market structure pattern breakout. Because of the constant volatility, the market structure is constantly being formed across all timeframes, providing a good market setup opportunity.
READ ALSO: CRASH 1000 INDEX BROKER
IS IT SAFE TO TRADE SYNTHETIC INDICES?
Synthetic indices are safe to trade and they are much more predictable compared to forex trading.
With synthetic indices, you don’t have to worry about sudden global events that can change the dominant trend of the market.
Synthetic indices are safe to trade because they have constant volatility across all time frames.
Synthetic indices are safe to trade as they are not bound to a market hour and trading sessions which affect the market liquidity.
With synthetic indices, a trader can effectively apply technical analysis trading fully assured that the indices will respond to price action.
Finally, synthetic indices are safe to trade because they can be traded any time of the day 24/7 holidays included.
ARE SYNTHETIC INDICES EASIER TO TRADE?
When you’ve traded other instruments, you can only say indices are easier.
For the record, by indices, I mean Deriv broker indices such as volatility 75, boom and crash, and so on.
Now, let’s get back to the question of “are synthetic indices easier to trade?”
As a trader who has traded both the forex and synthetic markets, I can say with certainty that synthetic indices are easier for a variety of reasons.
- Synthetic indices have a much lower spread compared to forex trading
- Constant liquidity
- Free of global events which continuously affect the conventional markets
- Respond better to market structure technical analysis
- Definitely much better for scalping even in 1 minute.
WHICH TIME FRAME IS BEST FOR VOLATILITY 75 INDEX
Volatility 75 index is volatile by design, this is why there is a significant profit or loss on a little move on the instrument, and therefore it is advised that small account holders should rather stay on lower timeframes to limit their risk.
That being said these are the three best time frames for volatility 75 index which should be traded after market analysis on higher timeframes as well.
The three-time frames are 15 minutes, 30 minutes, and 1 hour.
In these timeframes, a trader can limit risk and maximize profit.
In the above timeframes, you can find patterns and structures that support the dominant trend on a much higher timeframe like D1 and H4.
DOES PRICE ACTION WORK ON SYNTHETIC INDICES
Price action in the trading environment refers to market price reactions to important support and resistance zones, supply and demand, consolidations, order blocks, and other factors.
These price actions can fail at times, especially when there is high-impact news that can disrupt the market structure by breaking those zones, but this is not the case with synthetic indices.
Price action works well on synthetic indices and it works even better as there is no expected global news to disrupt the indices’ main trend. Because the behavior of synthetic indices is generated at random, it will respond better to support and resistance zones than traditional trading instruments, making it ideal for price action.