The multiplier has always been one of the most important and influential variables to consider when trading any financial instrument. Deriv multipliers combine the reward of leveraged trading with the low risk of options trading in the trading instruments.
Here is a blog post on how to use Deriv multipliers in trading leveraged positions.
What are Multipliers:
The multiplier is a popular trading tool that combines the benefits of “leveraged trading” with the “low risk of options trading” in the trading instruments. Derivative multipliers combine the reward of leveraged trading with the low risk of options trading in the trading instruments. This implies that if the market turns in your favor, you will be able to boost your potential gains by several times.
If the market swings in the opposite direction of your forecast, your losses are limited to the amount of money you invested.
Without using a multiplier, you will gain the minimal amount where you can get more if you take the advantage of multiplier trading.
- Without a multiplier, if the market goes up by 2%, you’ll gain 2% * $100 = $2 profit.
- With an x500 multiplier, if the market goes up by 2%, you’ll gain 2% * $100 * 500 = $1,000 profit.
Instruments traded on Multipliers:
These are the two most common instruments that can be traded on multipliers.
Forex:
Trade Forex with multipliers to take advantage of high leverage and narrow spreads, as well as a plethora of trading chances based on world events.
Synthetic Indices:
Synthetic indices are designed to closely resemble real-world market activity while eliminating real-world risk. Trade multipliers on Synthetic Indices at any time of day or night and take advantage of high leverage, tight spreads, and predictable generation times.
Like other trading platforms, the Deriv MT5 platform also offers synthetic indices. MT5 account is extremely popular and especially expert traders are more familiar with it. For the advanced charting facility, the platform is widely acceptable.
Cryptocurrency:
The cryptocurrency market is volatile, but when you find the right time to buy, it can provide very good returns. The trading type trading can be quite risky but with the multiplier trading feature, you can always have peace of mind.
On the other hand, crypto trading is becoming more and more popular, but the barrier to entry is still high.
What is the point of trading multipliers on Deriv?
As a user of the Deriv platform, you might be wondering: “What is the point of trading multipliers?” Though this question might not be directly related to the blog topic, it is an important question to answer before you start trading.
So, this portion will provide an insight into what the point is and why you should trade on Deriv.
- Better risk management is needed:
Innovative contract features such as stop loss, take profit, and deal cancellation allow you to tailor your contracts to your personal preferences and risk appetite.
- Market exposure has been increased:
Increase your market exposure while keeping your risk to a minimum relative to your stake level.
- Platform that is secure and responsive:
Enjoy trading on safe, intuitive platforms that are designed for both beginners and experienced traders.
- Amazing support:
When you need it, you’ll get competent, polite assistance.
- Trade at any time:
Multipliers are available on Forex, crypto, and synthetic indices, and you may trade them 24 hours a day, seven days a week, all year round.
- Crash/boom indices:
With Crash/Boom indices, you can predict and profit from dramatic surges and dips in the market.
How multipliers contracts work:
Choose the market on which you wish to trade and then choose the other key aspects, such as the trade type, the stake amount, and the multiplier value.
Then, specify extra parameters that allow you greater control over your trading, such as stop loss, take profit, and transaction cancellation, to give you greater control over your trading.
If you are pleased with the position you have specified, you should purchase the contract.
Consider the following considerations while trading multipliers:
The below points need to be considered while trading multipliers.
Stop Loss:
The trade will be closed, whether or not a stop loss is in place if the market moves in the opposite direction of your prediction and your loss reach the stop-out price. It is the price at which your net loss equals your stake that is known as the stop-out price.
Multipliers on Crash and Boom:
Deal cancellation is not accessible for Crash and Boom indices with multipliers.
The stop-out option will automatically terminate your contract when your loss reaches or surpasses a certain percentage of your initial investment. On DTrader, the stop-out percentage is shown underneath your wager and fluctuates based on your chosen multiplier.
You cannot utilize stop loss and deal cancellation simultaneously:
This is to safeguard your finances while utilizing deal cancellation. If you terminate your contract within an hour after starting the job, you are entitled to a full refund of your initial investment. Stop loss, on the other hand, will cause your contract to be closed at a loss if the market goes against you.
Once the cancellation period has expired, however, you can set a stop loss level on the open contract.
Cannot utilize the take-profit and deal cancellation functions simultaneously:
When you buy a multipliers contract with deal cancellation, you cannot choose a take-profit level. Once the deal cancellation period has expired, however, you can set a take profit level on the open contract.
Cancel and closure functionalities cannot be used concurrently:
If you acquire a contract with deal cancellation, clicking the ‘Cancel’ option will allow you to end the contract and receive a full refund of your investment. Using the ‘Close’ option, on the other hand, allows you to close your position at the current price, which might result in a loss if you close a losing transaction.
Conclusion:
Hope you enjoyed reading our blog post about multipliers. Multipliers are very confusing to many people and there is so much speculation about them. We wanted to provide a blog post about the point of trading them and how we use them.
