Synthetic indices are gaining attention among traders who want consistent price behavior and 24/7 access. Unlike traditional indices powered by real-world economic activity, synthetic indices are generated using a robust Random Number Generator (RNG). This creates market-like movements with stable volatility conditions — ideal for strategy testing and technical analysis.
Below is a simplified and practical guide covering how synthetic indices work, how to trade them, and how traders commonly use platforms like MetaTrader 5.
Core Trading Principles for Synthetic Indices
Even though synthetic indices move differently from traditional markets, fundamental trading concepts still apply:
- Risk Management – Adjusting position sizes and managing leverage helps maintain long-term stability.
- Trend Identification – Trend continuation and reversal patterns remain relevant.
- Technical Analysis – Support/resistance, momentum indicators, and volatility tools play a key role.
- Backtesting – Many traders use demo accounts to refine their approach before going live.
These principles form the foundation of how to trade synthetic indices effectively.
Popular Synthetic Indices
Synthetic indices are usually available in several categories, each designed to mimic distinct volatility conditions:
- Volatility Indices (e.g., Vol 10, 25, 75, 100)
- Step Indices – Move in fixed increments
- Jump Indices – Feature sudden movement spikes
- Range-Based Indices – Suitable for channel trading
Each index type offers different movement characteristics, allowing traders to choose options that suit their style.
Synthetic vs Traditional Indices: Quick Comparison
| Feature | Synthetic Indices | Traditional Indices |
| Price Basis | RNG-based simulation | Real economies & companies |
| Trading Hours | 24/7 | Exchange trading hours |
| Volatility | Fixed or consistent | Driven by global factors |
| News Impact | None | High |
| Behaviour | Stable patterns | Can be unpredictable |
Synthetic indices deliver consistency and uninterrupted access, while traditional indices respond to real market events.
Popular Trading Strategies for Synthetic Indices
Traders typically rely on:
- Breakout trading
- Range trading
- Trend following
- Scalping (especially on Step Indices)
These methods work well because synthetic indices follow predictable volatility profiles and clean technical patterns.
How Synthetic Indices Work
Synthetic indices use a robust RNG model to generate price movements that behave like live markets without external influences such as news or macroeconomic events.
This consistency makes them suitable for:
- Technical trading
- Strategy testing
- Pattern analysis
- Continuous 24/7 practice
Types of Synthetic Indices
Common categories include:
- Volatility Indices (10–100)
- Jump Indices
- Step Indices
- Range-Restricted Indices
Each index offers a different behavior pattern for traders to explore.
How to Trade Synthetic Indices?
Here’s how traders typically get started:
- Choose a trusted broker that offers synthetic indices (e.g., FXPrimus).
- Select a platform, with many traders preferring MetaTrader 5 for its advanced charting tools.
- Start on a demo account to practise safely and understand volatility behaviour.
- Analyse charts with indicators that match the index type.
- Use proper risk management when trading with leverage.
- Refine your approach by reviewing performance and adjusting your strategy.
If you’re learning how to trade on MetaTrader 5, the platform provides detailed charting, one-click trading, and custom indicators suited for synthetic index trading.
Advantages of Trading Synthetic Indices
- 24/7 market availability
- Consistent volatility conditions
- No impact from news or economic events
- Ideal for technical strategies and automation
- Smooth and structured price behaviour
These traits make synthetic indices appealing for both new and experienced traders.
FAQs
Are synthetic indices legit?
Yes. Synthetic indices are generated using a robust RNG that creates statistically modelled price movements. This means the behaviour is consistent and not influenced by real-world events, making them suitable for testing and technical trading.
Can I trade synthetic indices on a demo account?
Absolutely. FXPrimus offers a demo environment where traders can practise synthetic indices with real-time simulated prices. This helps new traders understand the movements and build confidence before trading live.
Are synthetic indices affected by slippage or liquidity issues?
Synthetic indices are designed to offer smooth execution, though conditions may vary depending on the platform. Most traders experience stable price feeds due to the controlled market environment.
Can synthetic indices be traded with leverage?
Yes. Many brokers offer leveraged trading on synthetic indices. With FXPrimus, traders can access competitive leverage while maintaining responsible risk management.
Are synthetic indices good for automated trading?
Many traders use automated or rule-based systems because synthetic indices follow statistical modelling. Their consistency helps automated strategies operate more predictably compared to news-driven markets.
Which synthetic index is best for beginners?
Beginners often start with lower-volatility indices such as Volatility 10 or 25. These provide smoother price action and make risk management easier while learning.
Conclusion
Synthetic indices offer a stable, continuous, and technically friendly environment for traders who want structured price behaviour. With their predictable volatility profiles, they are ideal for practising strategies and analysing patterns around the clock.FXPrimus provides a safe, transparent, and client-focused environment with advanced platforms including MetaTrader 5, making it easy to explore and trade synthetic indices confidently.
Practice on a demo account, analyse markets on MT4, MT5, or WebTrader, and experience trading in The Safest Place to Trade.