Why is my Deriv trade lost immediately?

You just opened up a position on Deriv and, barely the trade launched, you already see a loss?

Don't panic: in many cases, it doesn't mean your analysis was necessarily bad.

This situation can be explained by several factors related to the opening of a position, in particular the spread, the performance price and market conditions.

Understanding this mechanism is essential to avoid making an emotional decision a few seconds after its entry.

Why does my trade start in negative?

When a position is opened, the price at which you purchase or sell is not necessarily the same as the price at which your position could be immediately closed.

This is in particular related to the spread, i.e. the difference between the purchase price and the sale price.

Your position must therefore generally evolve sufficiently in your direction to cover this initial cost before posting a positive result.

Simple example

Let's imagine you were opening a buying position.

At the time of opening, your platform immediately displays a small loss.

But the market has not necessarily evolved against you significantly.

Why?

Because your position must first absorb the difference between the purchase price and the price at which it could be resold.

That's why it's perfectly possible to see a trade start slightly in red before going into green.

Does this mean that Deriv deliberately loses traders?

No.

Seeing a position starting in negative is not alone proof of manipulation.

The operation depends in particular on the type of instrument, the rating conditions and the entry cost associated with the position.

Before you conclude that a problem comes from the platform, you must understand precisely the functioning of the market you trade.

Why can loss seem important?

Several factors can influence the results displayed:

• the size of your position;

• spread;

• the type of instrument;

• entry level;

• market movements;

• the conditions of execution.

Too large a position in relation to your capital can also make the variations in the result much more impressive.

What to do when a trade starts in loss?

The worst reaction is often panicking.

Avoid:

• close your position immediately only because it is red;

• increase your position to "renew";

• move your Stop Loss for no reason;

• Open several trades under the effect of emotion.

Your decision must depend on your trading plan, and not the momentary color of your position.

Should the spread be taken into account in your strategy?

Yes.

When building or testing a strategy, you must consider the actual conditions under which your trades are executed.

A strategy that seems excellent on a theoretical chart can produce different results once trading costs are taken into account.

It is for this reason that the backtesting, the demo account and trading journal are important.

Good risk management remains essential

Understanding the spread does not mean that a losing trade must be kept at all costs.

Your strategy must define in advance:

• your point of entry;

• your Stop Loss;

• your goal;

• the amount you agree to risk.

The goal is not to avoid all losses. The aim is to controlling their impact on your capital.

Conclusion

If your Deriv trade immediately starts in loss, it can simply be explained by the operation of the purchase price and the sale price, including the spread.

Before you panic or accuse the platform, learn to understand the conditions of your instrument and check your trading plan.

A trader who understands what he sees on his screen usually makes better decisions than a trader who simply reacts to a red or green position.

Ready to learn trading seriously?

Step 1: Create your Deriv account for free

Start by creating your Deriv account to discover the platform and train with a demo account.

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Step 2: Go to Bono Trading School

Once your account is created, join the Bono Trading training platform for free and start your learning step by step.

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Learn the basics, train, develop your method and work progressively towards better trading control.