Understanding the Step Indices evolution: Step, Multi Step, Skew Step
Deriv's synthetic markets are constantly evolving, bringing new trading opportunities along with them. The latest innovations, the Multi Step and Skew Step Indices, enhance versatility in synthetic trading and mark important milestones in the development of the Step Index.
The Step Index has progressed through four key stages:
1. The original Step Index
It all started with the Step Index, which was built on a foundation of predictability, offering a trading environment where each price movement is precisely defined.
Key features
- Fixed step size: Set at 0.1.
- Balanced movement: Equal chance of price moving up or down.
- Low volatility: Designed for more predictable trading.
Available indices
- The Step Index
2. The addition of step sizes
As demand grew, new Step Indices with bigger fixed step sizes were introduced. These offer the same predictable mechanics but with more volatility due to the wider steps, providing more trading opportunities.
Key features
- Larger fixed step sizes: Ranging from 0.2 to 0.5.
- Balanced movement: Equal chance of price moving up or down.
- Higher volatility: Volatility increases as step size grows.
Available indices
The number in the name reflects the fixed size of the step:
- The Step 200 Index
- The Step 300 Index
- The Step 400 Index
- The Step 500 Index
3. Multi Step Indices: A dynamic twist
Multi Step Indices combine the steady structure of the Step Indices with added flexibility. Each index includes multiple step sizes, with frequent smaller steps of 0.1 and occasional larger movements of 0.2, 0.25, 0.3, or 0.5, offering a mix of predictability and dynamism.
Key features
- Multiple step sizes: Ranging from 0.1 to 0.5.
- Balanced movement: Equal chance of price moving up or down.
- Low to moderate volatility: Mostly small steps with occasional larger swings, keeping movements predictable.
Available indices
The number in the name reflects the number of step sizes there are:
- Multi Step 2 Index
- Multi Step 3 Index
- Multi Step 4 Index
4. Skew Step Indices: Introduction to asymmetrical trading
Skew Step Indices build on the previous models by incorporating uneven step sizes and movement probabilities, adding a more natural market feel while retaining some structure. They offer 80% or 90% probability for small shifts and 10% or 20% for larger movements, allowing traders to take advantage of dynamic market changes with each tick.
Key features
- Multiple step sizes: Ranging from 0.1 to 0.5.
- Natural directional tendency: Tends to move in one direction (up or down) with occasional larger moves in the opposite direction.
- Moderate to high volatility: Adds more dynamic price swings.
Available indices
The name reflects the number of step sizes and whether it’s more likely to move up or down most of the time, with a chance of an occasional bigger move in the opposite direction:
- Skew Step 5 Up Index
- Skew Step 5 Down Index
- Skew Step 4 Up Index
- Skew Step 4 Down Index
Start synthetic trading with the Step Indices family today
The Step Indices family offers a more predictable trading environment than other synthetic markets, ideal for traders wanting structured strategies. As these indices evolve, they offer new ways to improve your trading approach.
How to start trading:
- Open a free practice trading account
- Begin with the basic Step Index to see how it moves.
- Practice with small trades to get comfortable with its patterns.
- Gradually try more complex versions as your confidence grows.
- Keep practising to refine your approach!
Disclaimer:
Trading is risky. Past performance is not indicative of future results. It is recommended to do your own research prior to making any trading decisions.
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