Risk disclosure

Trading digital options and synthetic indices carries a high risk of losing your money. Most people who trade them lose money. This page explains, specifically, how.

Every contract has a house edge

Deriv's synthetic index contracts are priced so that the payout is below the break-even level implied by the probability of winning. A Digit Over 1 contract wins 80% of the time and typically pays 1.19 per 1 staked, where break-even would require 1.25. That gap — around 4.8% of every amount staked — is the house edge.

The full table of contract odds and edges is published on the backtester page. Edges range from roughly 2.5% on Rise/Fall and Even/Odd to about 5.2% on the wider digit barriers.

The consequence is arithmetic rather than opinion: the expected return on every trade is negative. Over enough trades, losses converge on the edge multiplied by total amount staked. Trading more often does not improve this; it accelerates it.

Staking strategies do not overcome the edge

Martingale, D'Alembert, Oscar's Grind, 1-3-2-6 and every variant of them are rules for choosing how much to bet next. They do not change the probability of any individual trade, and a sequence of negative-expectation bets has a negative expectation regardless of the sizes.

What staking plans do change is the distribution of outcomes:

• Recovery systems such as Martingale produce many small wins and rare very large losses. They look successful for long stretches and then are not. This is the single most common way accounts are emptied.
• Streak systems such as Reverse Martingale produce many small losses and rare large wins, and require patience through long flat periods.

Neither is safer than the other in expectation. They are differently shaped ways of arriving at the same place.

Past patterns do not predict future ticks

Synthetic indices are generated by a random number generator. Each tick's last digit is drawn independently and uniformly from 0–9. Any apparent pattern in recent digits — a "hot" digit, a long even streak, an unusual Over/Under split — is sampling noise, and carries no information about what comes next.

The digit analysis tools describe history. They do not forecast. Anyone selling a bot on the basis of digit prediction is selling you a misunderstanding at best.

Risks specific to automated trading

• Speed. A bot places trades far faster than you would manually, so a losing strategy reaches its loss limit far faster too.
• Unattended running. Without a loss threshold configured, a bot has no natural stopping point and will keep trading until the balance or the browser session ends.
• Technical failure. Network interruptions, websocket disconnects, browser tabs being suspended and API rate limits can all leave positions in unexpected states.
• Execution differences. Simulated results assume instant fills at quoted prices. Real payouts move, and latency is real, so live results are generally slightly worse than backtested ones.
• Account limits. Deriv caps the number of open positions and the aggregate payout across them. Running several bots at once can hit those limits mid-strategy.

How to reduce, not eliminate, your exposure

• Use a demo account until you have seen a strategy through several hundred trades.
• Always set a loss threshold. Always set a maximum stake on recovery systems.
• Run your exact settings through the backtester and look at the probability of ruin before committing money.
• Trade only funds you can lose entirely without it affecting your life.
• Never borrow to trade, and never increase stake size to recover a loss.

No advice is offered

Nothing on this site is financial, investment or trading advice, and nothing here is a recommendation to trade any instrument or to use any strategy. The content is educational. You are solely responsible for your trading decisions and for determining whether trading is appropriate and lawful in your jurisdiction.

Binary Pro is an independent tool and is not affiliated with, endorsed by, or operated by Deriv. Your account, funds and trades are held with Deriv and governed by Deriv's terms and conditions. Deriv's services are unavailable in several countries, including the United States and the United Kingdom. More about this project.

If trading is affecting your finances, relationships or wellbeing, treat that as a reason to stop. Support for gambling-related harm is available in most countries and applies equally to this kind of trading.