Understanding the Real Vs the Synthetic
Understandig difference between Real world traditng versus synthetic indices
What are Synthetic Indices?
Synthetic Indices are currently gaining a lot of recognition among traders has it has a lot of advantages that benefits traders, one of the benefits include: It doesn't include new and it is opened 24/7.
On January 15, 2015, the Swiss National Bank announced its decision to cancel its 1.20 peg against the euro, a move that sent ripples across the globe. Immediately, the currency was transformed from a haven to a highly risky asset, sending the forex market into chaos. Some traders suffered from negative balances, and many brokers got forced to shut down.
Black swan events like this have a steep cost for both traders and brokers since they directly affect financial markets. The worst part is that they are becoming more frequent. Within the past two decades alone, we've seen a global financial crisis, a rouble rout in Russia’s economy, plunging oil prices, Brexit, and the persisting COVID-19 pandemic.
Considering that these events significantly affect the financial market, it's understandable that trading on financial markets might be considered too risky for some. But, what if you could trade without being affected by global events?
This is where synthetic indices trading comes in.
What then are Synthetic Indices?
Synthetic Indices imitate real market movement but there are littlle differences. It is run by a third part to avoid tampering with or manipulation
What broker offers Synthetic Indices?
Currently, only deriv brokers offer Synthetic Indices trading and it can only be traded on mt5
What pairs do we trade on Synthetic Indices?
The major pairs we trade on Synthetic are
Volatility Indices
Boom and Crash
Range break
Jump Indices
Step Indices
Why trade synthetic indices?
Volatility indices are not affected by fundamentals unlike stocks and currency
You can start trading with a very low capital, as low as 1usd
There is no direct manipulation unlike Currency pairs
Synthetic Indices has low spread
Markets are easily predicted 80% of the time as it follows basic Price Action.
To learn more tips on the Synthetic market either as a newbie or an already trader, get timely information about the Synthetic Indices market.
......@Sash SanjayShah
