Exponential Growth Indices: The complete guide to trading EGIs on Deriv

Exponential Growth Indices (EGIs), developed by Deriv, are at the forefront of innovation in synthetic markets, offering traders exposure to a new class of assets where the price adjusts by a fixed percentage at every tick. By mirroring the percentage-based movement of real financial instruments, EGIs provide a unique combination of consistent steps and exponential trading opportunities.

In this guide, you’ll learn what Exponential Growth Indices are, how they work, which platforms you can use for trading, and what sets EGIs apart from other synthetic indices - computer-generated indices that simulate real world market movements. Whether you are new to Deriv MT5 trading or looking to enhance your portfolio with exponential growth, this in-depth resource will provide actionable strategies, risk management insights, and a clear trading edge.

Quick summary

• Exponential growth indices (EGIs) change price by a fixed percentage every tick, creating realistic, compounding movement.
• Traders can choose between EGI1 (±0.01% per step) and EGI2 (±0.02% per step).
• EGIs are exclusively available on Deriv (currently via Deriv MT5 and Deriv cTrader), making them a unique synthetic index offering.
• The percentage-based structure supports both conservative and aggressive strategies, making EGIs suitable for a wide range of trading goals.
• EGIs present exponential trading opportunities, much like the compounding found in real-market instruments.
• Defined risk levels and clear position sizing strategies help traders manage exposure in volatile conditions.
• EGIs are unaffected by news, market sentiment, or fundamental analysis, providing a transparent, controlled trading environment.

What are Exponential Growth Indices?

Exponential Growth Indices (EGIs) are a new class of synthetic indices developed by Deriv, that change by a set percentage of their current spot price at each time step. Unlike fixed-step indices, where price moves in set increments, EGIs scale their movements as the price changes. There are 2 Exponential Growth Indices available at this time: EGI 1 and EGI 2.

Comparing EGI 1 & EGI 2 for different trading styles

• Exponential Growth Index 1 moves by ±0.01% of their current value per tick, making it a steadier, slower-moving index, thereby making it more suitable with traders with a lower risk appetite.
• Exponential Growth Index 2 moves by ±0.02% of their current value per tick, and therefore displaying greater market movements per tick. This index offers potentially greater rewards through more compounding, but also carries greater risk.  

Percentage-based movement gives EGIs more realistic price behaviour, similar to real financial markets, and enables the value to grow (or shrink) exponentially over time. The higher the index value, the greater the price change per tick.

How do Exponential Growth Indices work?

With every tick, occurring once every 2 seconds, Exponential Growth Indices change in value—either up or down—by a fixed percentage (±0.01% for EGI1, ±0.02% for EGI2) of the current spot price. This is the principle of compounding, or exponential growth: as the price rises, each movement grows proportionally, and likewise decreases as the price falls.

Example:

Suppose EGI1 is trading at 10,000.

On the next tick, the new price will be either:
10,000 + (0.01% of 10,000) = 10,001
or
10,000 - (0.01% of 10,000) = 9,999

This process repeats so that as price fluctuates, the absolute movement per tick increases or decreases—but the percentage remains steady. This compounding effect is similar to returns in real-world percentage-based assets like stocks or cryptocurrencies. 

Unlike traditional step indices, where each tick changes price by an unchanging amount (such as ±1), EGIs’ step size adapts as the index price shifts. This mechanism closely mirrors how equities behave in real markets, where movement is usually measured as a percentage.

What sets EGIs apart from other synthetic indices?

EGIs stand out from traditional market indices and existing synthetic step indices because of several key features:

• Percentage-based moves: Every price update is a fixed percentage, not a set amount, closely matching real asset behaviour.
• Transparent mechanics: You always know the size of each move, making risk management more straightforward.
• Exponential compounding: Each new movement builds on the last, offering potential for significant growth as prices climb.
• Growth rate choices: EGI1 is suitable for steady, lower-risk progression, while EGI2 supports higher growth and greater risk.
• Exclusive to Deriv: EGIs are unique and not available at most other brokers, offering a new synthetic trading market.

How to trade Exponential Growth Indices

Step 1 – Account access & platform navigation

• Log in to your Deriv account.
• Select either Deriv MT5 Standard account or Deriv cTrader account.
• Open a demo account first to practise risk-free.

Step 2 – Locating the EGIs

• Navigate to “Market Watch” in Deriv MT5 or “Symbols” in Deriv cTrader.
• Search for “Exponential Growth Index 1” or “Exponential Growth Index 2,” listed under Synthetic Indices.
• Right-click and add them to your watchlist if required.

Step 3 – Analysing the price action

• Use your platform’s charting tools.
• Look for exponential trend development, compounding moves, or reversal patterns.
• Keep in mind: spikes and abrupt disruptions are rare due to the model’s compounding nature.

Step 4 – Order placement

• Decide on trade direction: buy if you expect an increase, or sell if you anticipate a decrease.
• Choose an appropriate lot size; consider smaller positions for conservative approaches and larger ones for aggressive risk/reward.
• Set stop-loss and take-profit levels in percentage terms aligned with the exponential price movement.

Step 5 – Monitor and adjust

• Trail stops as prices move favourably to lock in potential profits.
• Watch how the index behaves over time steps and adjust your strategy as needed.

Trading strategies for exponential compounding

Exponential Growth Indices (EGIs) are designed to move by a fixed percentage at every tick, creating a unique environment compared to step-based or traditional market indices. Because their behaviour is governed by transparent mathematical models and not by real-world market forces or trends, there is no inherent directional bias or pattern to anticipate.

Some traders experiment with different approaches—including using technical analysis tools, such as moving averages or oscillators—to help manage entries and exits. However, it’s important to understand that these indicators may not be as effective on synthetic indices with randomised price action as they are in real markets. Since every tick is generated independently and outcomes are statistically random, results can differ significantly from those seen on assets that respond to external economic factors and established trends.

Many traders focus instead on core trading principles for EGIs, such as:

• Setting clear entry and exit rules based on personal risk tolerance.
• Applying strict percentage-based stop-loss and take-profit orders to control position exposure.
• Using consistent position sizing strategies to ensure that each trade’s risk remains manageable, regardless of recent performance.

Expert insight:
Because you know the exact size of each price movement in advance, EGIs can appeal to traders who value discipline and clarity in their trade planning.

Ultimately, successful trading on EGIs is often less about predicting direction and more about effective risk management and a consistent, disciplined approach.

Advantages and limitations of Exponential Growth Indices

Advantages

• Exponential compounding is ideal for traders seeking growth that accelerates with strong market trends.
• Movement mechanics are fully transparent—perfect for systematic and algorithmic traders.
• EGIs have zero correlation to global news, providing a fair and stable market at all times.
• Risk controls are straightforward thanks to the fixed percentage movement model.

Limitations

• Exponential growth works in both directions— potential losses can grow as quickly as potential gains.
• Unlike volatility indices, EGIs lack random "surprise" price spikes, which may not suit breakout traders.
• EGIs are not designed for traders looking for fundamental or real-market exposure.

Future developments & market trends

Deriv is always working to enhance its synthetic index offerings. Look for upcoming advanced order types, analytics, and possibly new EGIs with various compounding rates in 2025 and beyond. As market trends evolve, Deriv aims to remain at the forefront of exponential trading opportunities.

In conclusion, Exponential Growth Indices combine realism, transparent market movement mechanics  and unique compounding characteristics in a synthetic market exclusive to Deriv. Due to these characteristics, EGIs can be an attractive new index for traders who value discipline and clarity in their trade planning. Try trading EGIs on your demo account to become familiar with their unique movement. 

Ready for the next step? Log in and experience exponential trading Exponential Growth Indices for yourself.

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