The evolution of Step Indices: Step, Multi Step, and Skew Step

Step indices are synthetic indices offered exclusively on Deriv that move in fixed price increments (steps) according to predefined probability rules. They are designed to let traders focus purely on price behaviour, without the influence of economic news, earnings reports, or geopolitical events.

Within Deriv’s synthetic indices range, the Step Index family stands out for its transparency and mechanical structure. Each variant follows a clear set of movement rules, making them suitable for systematic analysis, strategy testing, and skill development. Over time, this family has expanded from the original Classic Step Index to include Multi Step and Skew Step indices, covering a spectrum from highly predictable movement to controlled asymmetry that resembles real market behaviour.

This guide explains how each Step Index works, how they differ from one another, and how traders can approach them using Deriv’s trading platforms.

Quick summary

• Step indices are synthetic markets on Deriv that move in fixed step sizes per tick.
• The classic Step Index uses a constant step size and perfectly balanced up/down probability.
• Higher-step variants (Step 200–500) increase volatility while keeping the same core logic.
• Multi Step indices introduce variable step sizes while maintaining balanced direction.
• Skew Step indices add directional bias and asymmetric movement patterns.
• All Step indices run continuously and are unaffected by real-world events.
• Traders can practise all Step indices using a Deriv demo account before trading live.
  

The classic Step Index: fixed structure and balanced probability

The classic Step Index is the foundation of the Step Indices family. It was created to provide a controlled environment where price movement follows simple, transparent rules.

How the classic Step Index works

• Step size: Fixed at 0.1 per tick
• Direction probability: 50% upward, 50% downward
• Drift: None
• External influence: None

Each tick moves the price up or down by exactly 0.1, with no directional bias over time. Because the step size and probabilities never change, volatility remains low and consistent.

Why traders use the classic step index

• Clean, stable charts suitable for technical analysis
• Ideal for learning concepts such as support, resistance, and range trading
• Useful for testing mechanical or rule-based strategies
• Lower risk per tick compared with larger-step variants

The Classic Step Index is often used by newer traders and by experienced traders who want a neutral testing environment.

Larger step indices: increasing volatility without changing the rules

To meet demand for stronger price movement, Deriv introduced higher-step versions of the Step Index. These indices follow the same probability structure but use larger step sizes.

Available higher-step variants

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Key characteristics

• Direction probability remains balanced at 50/50
• Only the step size changes, not the underlying logic
• Risk and reward per tick increase as step size increases

These indices are commonly used by active traders who prefer wider stop-loss levels, larger price swings, or breakout-based strategies.

Multi step indices: variable movement with balanced direction

Multi Step indices add controlled variability to the Step Index structure. Instead of using a single fixed step size, they alternate between small and larger steps.

How multi step indices work

• Base step: Most ticks move by 0.1
• Occasional larger steps: 0.2, 0.25, 0.3, or 0.5 (depending on the variant)
• Direction probability: Still balanced at 50% up and 50% down

The direction of each tick remains unbiased, but the size of the move can vary.

Common multi step variants

• Multi Step 2 Index: Mix of 0.1 and 0.2 steps
• Multi Step 3 Index: Includes 0.25 steps
• Multi Step 4 Index: Includes steps up to 0.5

Trading implications

• Volatility is generally low to moderate
• Sudden larger steps can disrupt static range strategies
• Markets remain analysable but less repetitive than the Classic Step Index

Multi Step indices suit traders who want structure but prefer occasional variation to reduce predictability.

Skew step indices: asymmetric movement and directional bias

Skew Step indices introduce directional asymmetry, making them the most dynamic members of the Step Index family.

How skew step indices work

• Step sizes: Range from 0.1 to 0.5
• Dominant movement: 80–90% of ticks use smaller steps, often biased in one direction
• Counter-moves: 10–20% of ticks produce larger steps in the opposite direction

This creates periods of directional runs followed by sharp corrections.

Available skew step variants

• Skew Step 4 Up Index
• Skew Step 4 Down Index
• Skew Step 5 Up Index
• Skew Step 5 Down Index
  

Why traders use skew step indices

• Momentum and breakout opportunities
• Mean-reversion setups after large corrective moves
• Stress-testing risk management under asymmetric conditions

Skew Step indices are typically used by experienced traders or algorithmic strategies that adapt to changing volatility.

Practical trading approaches for step indices

Range trading on the classic step index

• Identify horizontal support and resistance zones.
• Enter trades near range extremes.
• Use tight stop-losses due to low volatility.

Breakout strategies on higher-step indices

• Watch for consolidation periods.
• Trade confirmed breakouts as volatility expands.
• Use trailing stops to manage extended moves.
  

Adapting to multi step and skew step behaviour

• Monitor clusters of small steps for volatility shifts.
• Adjust position size after large or skewed moves.
• Automated strategies can be used to identify probability-weighted patterns.

Risk management considerations

Common mistakes include overtrading, ignoring volatility changes, and entering immediately after large steps without confirmation.

Backtesting and demo practice

Deriv’s demo account allows traders to:

• Analyse historical step behaviour
• Test strategies under different volatility conditions
• Practise execution without financial risk

This is particularly useful for Multi Step and Skew Step indices, where behaviour changes over time.

The Step Index family on Deriv provides a structured way to engage with synthetic markets, ranging from fully balanced movement to controlled asymmetry. The classic Step Index offers a stable environment for learning and testing, higher-step variants increase volatility without altering core rules, and Multi Step and Skew Step indices introduce variability and directional bias for more advanced strategies.

By understanding how each index is constructed and choosing the variant that aligns with their risk tolerance and trading style, traders can approach Step indices with clarity and discipline. To get started with trading Step Indices, use your demo account to practice trading these indices in a risk-free environment. 

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