Master Synthetic Indices Trading: 3 Actionable Strategies for 24/7 Markets

Imagine a market that never sleeps. No, I’m not talking about the 24/5 grind of the standard Forex market. I’m talking about a market that is open 365 days a year, unaffected by NFP Friday, central bank interest rate hikes, or even a sudden tweet from a billionaire.

Welcome to the world of Synthetic Indices.

If you’ve spent any time on trading forums lately, you’ve likely seen the buzz around Volatility 75 (V75) or Boom and Crash. For intermediate traders, these instruments offer a unique proposition: pure technical analysis. Because these indices are governed by algorithms rather than geopolitical events, they respect price action structures with a level of purity that EUR/USD can only dream of.

In this guide, we aren’t just going to define what they are. We’re going to dive into the mechanics of how they move and, more importantly, how you can extract profit from them using three specific, battle-tested strategies.

Understanding the Algorithm: Why Synthetics Are Different

Unlike traditional currencies, synthetic indices are simulated markets. They are created using a cryptographically secure random number generator (PRNG) that mimics real-world market behavior.

Now, I know what you’re thinking: "If it's an algorithm, isn't it rigged?"

Actually, it’s the opposite. Because the algorithm is audited by third-party bodies (like the MGA), it ensures that the price movement is completely independent of the broker’s influence. The beauty here is the lack of fundamentals. You don't have to worry about a sudden war or an inflation report wiping out your stop-loss.

In synthetic indices, the trend is truly your friend. These indices are designed to have constant volatility. For example, the Volatility 100 Index has a constant volatility of 100%, making it far more predictable in terms of "average daily range" than a pair like GBP/JPY.

The Math of the Move: Lot Sizes and Point Values

This is where most intermediate traders blow their accounts. You cannot apply your EUR/USD lot size logic to V75. If you try to open a 0.10 lot on V75 like you do on Gold, your account might vanish in seconds.

Let's look at Volatility 75 (V75).

Example: On many platforms, the minimum lot size for V75 is 0.001. If you enter at a price of 450,000.00 and the price moves to 450,100.00, that 100-point move with a 0.001 lot size is worth $0.10. If you were trading a 0.10 lot, that same move would be $10.00.

Always calculate your risk management parameters before clicking 'buy'. Because these indices move so fast, a 1% move on V75 is significantly more volatile than a 1% move on the S&P 500.

Strategy 1: The V75 Mean Reversion Play

Volatility 75 is famous for its massive trends, but it also loves to return to its average. This strategy uses the Bollinger Bands (20, 2) and the Relative Strength Index (RSI, 14) on the 15-minute timeframe.

The Setup

1. Wait for the price to pierce the upper or lower Bollinger Band.
2. Look for the RSI to be in overbought (>70) or oversold (<30) territory.
3. Wait for a "rejection candle" (like a Pin Bar or Engulfing pattern) to close back inside the band.

Real-World Example

Imagine V75 is screaming upward. It hits 512,400, which is outside the upper Bollinger Band. The RSI is sitting at 78. You see a bearish engulfing candle close at 512,100.

• Entry: 512,100
• Stop Loss: 512,800 (just above the swing high)
• Take Profit: The middle moving average of the Bollinger Band (approx. 510,500)

This strategy exploits the algorithm's tendency to correct after extreme deviations. It’s high-probability because, unlike Forex, there’s no "news spike" to keep the price irrationally overextended for days.

Strategy 2: Catching the Spike on Boom and Crash

Boom and Crash indices are unique. Boom 1000 typically moves in small downward ticks but "booms" (spikes) upward randomly. Crash 1000 does the opposite—it ticks upward and "crashes" downward.

Intermediate traders often make the mistake of trying to "scalp the ticks." This is picking up pennies in front of a steamroller. Instead, we trade the spikes.

The "Demand Zone" Strategy

On the 1-hour chart, identify clear support levels (for Boom) or resistance levels (for Crash).

Pro Tip: Look for "Spike Clusters." These are areas where the market has spiked multiple times in the past. The algorithm tends to repeat these patterns.

The Trade:

• Asset: Boom 1000
• Condition: Price approaches a historical support zone at 12450.00.
• Execution: Place a Buy Limit order at 12452.00.
• Risk: Allow for 10-15 small ticks of drawdown. If no spike occurs within that range, exit manually.
• Reward: A single spike can often cover 50-100 ticks of movement, giving you an instant 1:5 risk-to-reward ratio.

Strategy 3: The Jump Index Breakout

Jump Indices simulate markets with sudden "jumps" in price, occurring on average once every 20 minutes. These are fantastic for breakout trading strategies.

The Setup

Use the 5-minute chart. Identify a tight consolidation range where the price has stayed for at least 30 minutes. Use a Donchian Channel or simply draw manual trendlines.

The Trade:

• When a "Jump" occurs that breaks the consolidation, wait for the first candle to close outside the range.
• Enter in the direction of the jump.
• Example: Jump 10 Index is range-bound between 50,200 and 50,300. A jump occurs, pushing the price to 50,350.
• Entry: 50,355
• Stop Loss: 50,280 (inside the previous range)
• Take Profit: 50,500 (targeting a 2:1 ratio)

Risk Management in a Simulated World

Because synthetic indices are available 24/7, the biggest danger is overtrading. In Forex, the market slows down during the Asian session, giving your brain a rest. Synthetics never slow down.

Warning: Never risk more than 1-2% of your equity on a single V75 trade. Because the price moves in large numeric increments, your margin can disappear faster than you can refresh the app.

Use a position size calculator specifically designed for synthetics. Remember that while the technicals are clean, the volatility is raw.

Conclusion

Synthetic indices are a powerful addition to any trader's arsenal, especially if you find yourself frustrated by the unpredictability of fundamental news. By mastering the mean reversion of V75, the spike mechanics of Boom and Crash, and the volatility of Jump indices, you can trade on your own schedule.

Start small. Test these strategies on a demo account to get a feel for the point movements. Once you understand the rhythm of the algorithm, you’ll realize that these markets offer some of the cleanest technical setups in the trading world.

Ready to level up your technical analysis? Check out our Advanced Charting Guide to refine your entries.

Frequently Asked Questions

Are synthetic indices regulated?

Yes, while the indices themselves are proprietary to specific platforms like Deriv, the brokers offering them are regulated by authorities such as the MFSA and the LFSA. The pricing algorithms are also audited by independent firms to ensure fairness.

Can I trade synthetic indices on MetaTrader 5?

Yes, most traders use the MT5 platform to trade these indices. You simply need to link your synthetic account from your broker to the MT5 app using the provided server credentials.

What is the best time to trade Volatility 75?

Since synthetic indices are not affected by global time zones or market opens, there is no "best time." However, many traders find that liquidity and price action patterns are most consistent during the London and New York overlaps (12:00 PM to 4:00 PM GMT).

Why do my stop losses sometimes get skipped on Boom and Crash?

On Boom and Crash indices, if a spike happens, the price "jumps" over your stop loss. You will be exited at the next available price after the spike. This is why it is highly recommended to trade in the direction of the spikes rather than against them.