Trading terms, explained properly
Most people lose money on their first automated session not because the bot failed, but because they pressed start without knowing what stake, stop loss or martingale actually meant. Every term below is one you will meet in the first ten minutes of using a trading bot. Read it once and the settings screen stops being a guess.
The one that costs the most
Martingale
Increasing your stake after a loss so that a single win recovers everything the losing run took. If you lose $1 and the multiplier is 3.1, the next trade is $3.10 — win it and you are level again. It is a genuine technique, used by several of our bots, and it has one weakness that decides everything: it only works while the balance can still fund the next step.
| Loss in a row | Stake needed now | Already lost getting here |
|---|---|---|
| 1st | $1.00 | $0.00 |
| 3rd | $9.61 | $4.10 |
| 5th | $92.35 | $43.50 |
| 6th | $286.29 | $135.85 |
| 7th | $887.50 | $422.14 |
| 8th | $2,751.26 | $1,309.64 |
Seven losses in a row is not exotic; it happens. The lesson is not "avoid martingale" — it is start small enough that the ladder has somewhere to go, and set a stop loss that ends the run before the balance does.
What you set before you start
The four numbers you control
Stake
The money on a single trade. The most important number you own, because it sets the scale of everything else — how much a loss costs, how far a recovery ladder can climb, how long the balance survives a bad patch. When in doubt, halve it.
Take profit
The profit at which the session ends. Reach it and the bot stops itself automatically — it does not carry on, and you do not need to be watching. Choosing to stop while ahead is most of what separates traders who keep gains from those who return them.
Stop loss
The loss at which the session ends. Set it before you start, when you are calm, because the moment you most need it is the moment you will most want to move it. The bot will not argue with the number; you would.
Balance
What is actually in the account. It is not ambition — it is the room your strategy has to work in. A recovery strategy on a balance too thin to fund the recovery is not a strategy, it is a countdown.
Reading results
Terms that describe how it went
Drawdown
How far the balance fell from its highest point before recovering. Peak $500, dip to $380, that is a $120 drawdown — 24%. It matters more than the final figure, because it tells you what the strategy put you through to get there.
Win rate
The share of trades that won. It says nothing about size, so it is easy to mislead with. A bot winning 90% of trades loses money if the other 10% are much bigger. Always ask what the balance did.
Losing streak
Consecutive losses. Every strategy has them and they are not evidence of a broken bot. They are the thing your stake and stop loss exist to survive.
Payout
What a winning trade returns, stake included. A 95% payout on a $1 stake returns $1.95 — a 95¢ profit. It is why a 50% win rate is not break-even: the wins pay slightly less than the losses cost.
Over-trading
Running longer, bigger or more often than your plan allows, usually to win something back. It is the single most common way an account is lost, and it is a human failure, not a bot one.
Demo account
A broker-issued practice account with fake money and real live prices. Every strategy you have not personally watched lose belongs here first.
On Deriv specifically
Terms you will only meet here
Synthetic indices
Markets Deriv generates from a random source rather than from real supply and demand. Volatility 10 through 100 are the common ones — the number tells you how violently price moves. They run 24 hours a day, weekends included.
Tick
One price update. Many digit contracts last a single tick, which is why these bots can place hundreds of trades in a session — and why stake discipline matters so much more than it would on a slower market.
Digit contracts
Bets on the last digit of the price: Differ, Even/Odd, Over/Under a number. Most of our free bots trade these.
Rise/Fall
A straight direction bet — will the price be higher or lower when the contract ends. CALL is rise, PUT is fall.
No Touch
A bet that price will not reach a set level before the contract expires. It pays when a market stays in its range.
Options account
The Deriv account these contracts trade from. If your balance looks smaller here than in Deriv, open your Deriv portfolio and transfer funds across so the full amount shows.
The part no bot does for you
Five habits worth more than any strategy
Decide the loss before the trade
If you cannot say what a bad session costs, you have not set a limit — you have set a hope.
Never move a stop loss down
Moving it is the moment a manageable loss becomes an account-ending one.
Stop when take profit hits
The bot already does. Do not restart it to chase more out of the same session.
Never trade money you need
Rent money changes the decisions you make, and every one of them for the worse.
Demo anything you have not watched lose
You do not know a strategy until you have seen its bad day.
Now the settings screen makes sense
Eleven free Deriv bots. Set a stake, a take profit and a stop loss, and start one on demo.