How to Trade Accumulator Options on Deriv Trader

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The conventional method of trading the financial market is one of the most mentally demanding adventures in life. Leaning on many years of trading experience, I can confidently accept the fact that, it is one thing to be a good analyst of the financial market but an entirely different stuff to be a profitable trader. This is because, trading goes beyond knowing how to carryout technical and fundamental analysis to include how you think, feel and react to both losses and profits. Additionally, this takes place over time and so does the mental stress and demands. In this article we will be looking at how to trade accumulator options on Deriv trader.

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To reduce the mental demands of conventional trading, many financial institutions and rich-thick capitalist traders devised alternative trading measures such as invention of technical indicators, robots, Expert advisor (EA) and other types and forms of trading aids and options. However, only a reasonable number of traders tend to capitalize on these trading aids due to the certain limiting factors that comes with its use. Additionally, these limitations are further compounded by tutors and users whose reviews are often biased. But, does that mean that trading aids or alternative trading options do not work? Surely, they do but only to those who know how to use them.

One of the strategic means that Deriv has introduced as a means of modifying the conventional trading culture is by introducing the use of trading accumulators. Just like the well-established methods of trading, the use of accumulators helps traders to capitalize more on market movements through price stability predictions. What this means is that, against the conventional means of trading the market using price volatility, accumulators to leverage on market prices within a well-defined price boundaries or ranges. Through this means, traders can accumulate their profit by using defined levels of percentages per stake per tick. So if you want to know how to trade accumulator options on Deriv trader read on.

What are Accumulator Options and How Do They Work?

Accumulator options are one of the newly introduced trading options that only Deriv offers on its platform. It serves as an ideal avenue for traders seeking fast-paced, strategic trades while balancing risk and reward effectively. To gain from trading accumulators, understanding price movement serves as the foundation to lean and grow from. This is because, trading in a defined zone is the pivot for accumulator trading.

Accumulator options are a unique trading instrument that allows traders to profit from market stability (trading within a predetermined individual range). These options enable traders to benefit from sideways movements within a predefined range, with potential profits that can grow incrementally. This implies that a trader can only grow his account by gaining from a fixed price range as determined by the system.However, the percentage of growth or profit made is based on a chosen stake growth rate such as 1%, 2%, 3%, 4% and5%per tick.

If a trader trades with 1% growth rate, such has a wider price range when compared to a trader who staked his growth rate at 5%. This

Types of Financial Assets in Accumulator Options

Accumulator trading is only available for continuous indices assets in the synthetic indices. This include sassets such as Volatility indices and Volatility (1s) indices (Volatility 10 (1s) Index, Volatility 10 Index, Volatility 25 (1s) Index, Volatility 25 Index, Volatility 50 (1s) Index, Volatility 50 Index, Volatility 75 (1s) Index, Volatility 75 Index, Volatility 100 (1s) Index, Volatility 100 Index, Volatility 150 (1s) Index and Volatility 250 (1s) Index).

Beside the afore mentioned assets, accumulator options trading does not work. However, alternatively, the multiplier trading option can be used.

How to Trade Accumulator Options on Deriv Trader

If you want to know how to trade accumulator options on Deriv trader , the following should be noted.

  • The minimum amount of money used is 1 USD and above
  • The percentage stake is between 1 and 5. The higher the percentage stake, the tighter the price range and the lower the percentage stake, the more loosed the price range. For instance, 1% stake has a wider price range than 2% stake and above.
  • You can only initiate a buy order in accumulator trading. The sell order comes in as an as a means of ending the buy order trade.
  • You can end the trade manually by clicking on the sell option. Conversely. You can allow the trade to run to the desired set take profit.

Some Strategies for Trading Accumulator Options

The strategy for trading the accumulator option depends on the chart form used. This is because, it is designed to trade differently as a tick or time frame

To trade with a tick using the area chart, indicator trading is the best trading strategy. This might use indicators such as Moving Averages, Bollinger Bands, Detrended Price Oscillator, MACD, Price Rate of Change, Relative Strength Index (RSI) and Stochastic Oscillator.

However, to trade using timeframes such as 1Minute, 5Minutes, 1Hour, 4Hours, and 1Day etcetera, the platform enables the use of area chart, candlesticks, hollow candles and bar charts (OHLC). Additionally, this allows price action trading but with a limitation of trading only naked charts since it is yet to accommodate the use of trendlines, horizontal lines, Fibonacci tools and other price action technical tools.

Benefits of Trading Accumulator Options

The following are some of the benefits which make accumulator options a potentially lucrative and dynamic trading instrument.

Ability to Profit from Sideways Markets

Accumulator options allow you to capitalize on stable, sideways market conditions by earning compounded gains as long as the price stays within a predefined range. This is different from traditional options which require predicting the direction of the market move.

Customizable Risk/Reward

You can choose a growth rate between 1-5% to balance your risk and reward. A higher growth rate means a narrower price range and higher potential returns, but also higher risk. This flexibility allows you to tailor the trade to your market outlook and risk tolerance.

Controlled Risk

A trader’s potential loss is limited to the initial trading amount he or she chooses. This provides trading within a defined risk. This is beneficial compared to some other leveraged products where losses can exceed the initial stake.

Fast-Paced Trading

Accumulator options are available with durations up to 230 ticks or with timeframes up to daily (1D). this allows for quick compounding of gains in a short time frame since it leverages short-term trading opportunities.

24/7 Trading

Trading the accumulator option can be done everyday of the week and even on weekends and holidays. This means that there is no break, fundamental interference. This provides flexibility in choosing your trading times.

Limitations of Trading Accumulator Options

To every good thing, there are limitations and loopholes. Trading accumulator options has the following as some of its limitations.

Complexity and Lack of Transparency

Accumulator options are more complicated than other trading instruments, which may make them unsuitable for inexperienced traders. Fees and pricing are not always transparent, with additional fees potentially built into the contract premium.

Poor Liquidity

Trading volumes tend to be lower with accumulator options, which can make it more difficult and expensive for traders to open and close positions. Investors can’t easily sell their accumulator contracts, resulting in non-existent liquidity.

Capped Upside and Unlimited Downside

The “knockout” clause in accumulator options limits the upside returns, while the “double down” clauses require the investor to buy disproportionately more of the underlying asset at regular intervals, exposing them to potentially unlimited losses.

Lack of Protection

Accumulator options provide no protection for the investor against adverse price movements in the underlying asset. Investors remain fully exposed to unfavorable exchange rate fluctuations which comes primarily as slippage.

Potential for Losses

If the underlying asset’s price moves against the trader’s position, they lose the entire money used as stake amount.

These highlight the risks involved in trading accumulator options and the importance of fully understanding the product before engaging in this type of trading.

How to Avoid Losing Money in Trading Accumulator Options

Practice with Demo Accounts

Before committing real funds, practice trading accumulator options on demo accounts provided by brokers like Deriv to gain experience. Also this will also help to sharpen a trader’s strategies without any risk of losing money.

Seek Professional Advice

Learning from an expert always come with advantages. One of which is to have a good financial advice on specific trading instruments, trading goals and risk tolerance.

Avoid Chasing High Growth Rates

While higher growth rates such as 4-5% offers the potential for greater returns, they also come with significantly higher risk as the price range is narrower. Choosing a growth rate that aligns with your risk tolerance is essential.

By understanding the complexities of accumulator options, managing risks effectively, traders can mitigate the risks associated with trading these instruments and improve their chances of success.

Common Misconceptions about Trading Accumulator Options

The following are some common misconceptions about trading accumulator options

Easy Profits in Sideways Markets

While accumulator options offer the potential for profits in sideways markets, they are not a guaranteed way to make easy money. Traders need to carefully analyze market conditions and manage risks effectively to succeed.

Limited Risk

Accumulator options have a capped potential loss. This exposes traders to significant risks, especially if the market moves against their position. It’s essential to understand the risks involved and implement proper risk management strategies

Suitable for Inexperienced Traders

Accumulator options are complex financial instruments that may not be suitable for inexperienced traders. Their complexity and potential risks make them more suitable for traders with a good understanding of derivatives trading

High Liquidity

Accumulator options has low trading liquidity. This makes it challenging for traders to open and close positions easily. This lack of liquidity can lead to higher trading costs and difficulties in executing trades.

Guaranteed Returns

There is no guarantee of returns in trading accumulator options. While they offer the potential for high rewards, traders can also incur losses, especially if the price goes against the predicted direction or if the market conditions change unexpectedly.

By understanding the complex nature of accumulator options, traders can approach it with a more informed and realistic perspective.


Risk Disclaimer

Deriv offers complex derivatives, such as options and contracts for difference (“CFDs”). These products may not be suitable for all clients, and trading them puts you at risk. Please make sure that you understand the following risks before trading Deriv products: a) you may lose some or all of the money you invest in the trade, b) if your trade involves currency conversion, exchange rates will affect your profit and loss. You should never trade with borrowed money or with money that you cannot afford to lose.

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