Synthetic indicesUpdated 3 min readBy the FXNOD team
Step Index on Deriv: what it is and how it moves
A Step index is a Deriv synthetic index whose price moves up or down by a fixed amount on every tick. Deriv describes steps of 0.1, 0.2, 0.3, 0.4 or 0.5, depending on the variant. There are no large jumps and no changing volatility. Every tick is the same size; only the direction varies.
The variants
| Family | How it moves, according to Deriv |
|---|---|
| Step | Up or down by a fixed step of 0.1 to 0.5 on each tick |
| Multi Step | Usually by 0.1, and less often by 0.2, 0.25, 0.3 or 0.5 |
| Skew Step | Small shifts most of the time, with an 80% or 90% probability, and sharp moves the rest |
Deriv's page does not state the probability of an up step against a down step on the standard Step index. Check the specification for the exact index before assuming anything about it.
What a fixed step produces
A series that moves by the same amount each tick, in a random direction, is the textbook random walk. It still produces charts with long runs, channels and apparent trends, because random walks do. After 100 steps of 0.1 with an even chance each way, the price is typically about 1 away from where it started, and it could be anywhere within about 2 either side.
| Steps of 0.1 | Typical distance from the start | Rarely more than |
|---|---|---|
| 100 | About 1.0 | About 2.0 |
| 400 | About 2.0 | About 4.0 |
| 10,000 | About 10 | About 20 |
These figures assume an equal chance of up and down on each tick. They show the scale of drift that pure chance creates, and are not a specification from Deriv.
Why traders like it
- No sudden spikes: the worst single tick is one step.
- A stop is unlikely to be jumped over, because the price cannot gap.
- The risk of a position is easy to calculate in steps.
What it does not give you
Calm is not the same as predictable. A smooth chart invites trend lines and patterns, and on a random walk they have no forecasting value. The even pace also tempts traders into large positions, and a long run against a leveraged position does the same damage as a spike, only more slowly.
Trading it
- Count risk in steps: stop distance in steps multiplied by the value of a step for your size.
- Use the demo account to see how long runs really last.
- Keep leverage low. A hundred steps against you is an ordinary event.
Questions people ask
- What is a Step index?
- A synthetic index that moves up or down by a fixed amount on every tick, with no jumps.
- What is the difference between Step 100 and Step 500?
- The variants differ in step size, which Deriv gives as 0.1 to 0.5. Check the specification of each index in your account.
- Is the Step index easier to trade?
- It is steadier, with no spikes. Its direction is no easier to predict than any other synthetic index.
Trade a synthetic index on demo
Pick any index your Deriv account offers in Trade Pilot, or let a bot trade it at a flat stake with a required stop loss. Virtual funds first.
Get started