Deriv - Complete Educational Guide
This comprehensive educational guide explores Deriv from multiple perspectives: platform features, trading instruments (including unique synthetic indices), account types, risk management, and educational resources. Always begin with a demo account to understand platform functionality and risk controls before considering live trading.
Educational Note: This guide is for educational purposes only. Trading carries significant financial risk, and Deriv's synthetic products involve unique risks. Between 65-80% of retail investors lose money when trading CFDs and other leveraged products. Never trade with money you cannot afford to lose.
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Table of Contents
Deriv Platform Overview
- Recommended Brokers
- Company Background & Regulation
- Trading Platforms Comparison
- Account Types & Features
- Mobile Trading Experience
Trading Instruments
Trading Strategies & Tools
- Trading Tools & Indicators
- Strategy Builder & Bots
- Synthetic Indices Strategies
- Risk Management Features
Education & Community
Deriv Company Background & Regulation
Deriv.com (formerly Binary.com) is an online trading platform established in 1999. The company has evolved from its binary options origins to become a multi-asset broker offering CFDs and other derivative products. Understanding Deriv's background and regulatory framework is essential for informed trading decisions.
Regulatory Status & Jurisdictions
| Regulatory Body | Jurisdiction | Entity Name | Client Protections |
|---|---|---|---|
| Malta Financial Services Authority (MFSA) | Malta & European Union | Deriv Investments (Europe) Limited | Segregated accounts, Investor Compensation Scheme |
| Labuan Financial Services Authority (Labuan FSA) | Malaysia | Deriv (FX) Ltd | Segregated accounts, dispute resolution |
| Vanuatu Financial Services Commission (VFSC) | Vanuatu | Deriv (V) Ltd | Basic regulatory oversight |
| British Virgin Islands Financial Services Commission (BVI FSC) | British Virgin Islands | Deriv (BVI) Ltd | Basic regulatory oversight |
Company Evolution & Milestones
Key Milestones in Deriv's Development:
1999: Company founded as Binary.com, focusing on binary options trading
2000: Launch of first online trading platform
2015: Introduction of synthetic indices for 24/7 trading
2018: Rebranding from Binary.com to Deriv.com
2019: Expansion into CFDs and multi-asset trading
2020: Launch of Deriv X and Deriv MT5 platforms
2021: Introduction of Deriv Bot and strategy builder tools
2022-Present: Continued platform enhancements and global expansion
Regulatory Consideration: Deriv operates through multiple entities with different regulatory protections. European clients receive stronger regulatory safeguards through the MFSA-regulated entity, while other jurisdictions may offer fewer protections. Always verify which entity you're trading with and understand the applicable regulatory framework.
Deriv Trading Platforms Comparison
Deriv offers multiple trading platforms tailored to different trading styles and experience levels. Understanding the features and limitations of each platform is crucial for selecting the right trading environment for your needs.
Platform Overview & Comparison
| Platform | Best For | Key Features | Mobile App | Instrument Coverage |
|---|---|---|---|---|
| DTrader | Quick trades, synthetic indices | Simple interface, one-click trading, basic charts | Yes | All instruments except stocks |
| DBot | Automated trading, strategy building | Visual strategy builder, backtesting, automation | No | Synthetics, forex, commodities |
| Deriv MT5 | Advanced charting, algorithmic trading | Advanced charts, expert advisors, market depth | Yes | All instruments including stocks |
| Deriv X | Customizable workspace, multi-asset | Highly customizable, advanced order types | Yes | All instruments including stocks |
| SmartTrader | Binary options, simple trades | Basic interface, quick trades | Yes | Synthetics only |
DTrader Platform Deep Dive
DTrader is Deriv's flagship platform for quick and intuitive trading. It's designed for traders who want fast execution with a clean, user-friendly interface.
One-Click Trading
Execute trades instantly with a single click for rapid market entry and exit.
Basic Charting
Integrated charts with essential technical indicators and drawing tools.
Trade Parameters
Easily set stake, duration, and barrier levels for each trade.
Quick Asset Switching
Switch between different trading instruments without leaving the platform.
Deriv MT5 Platform Features
Deriv MT5 provides the full MetaTrader 5 experience with access to Deriv's complete product range, including stocks and stock indices not available on other platforms.
| Feature | Description | Benefit |
|---|---|---|
| 21 Timeframes | From 1-minute to 1-month charts | Comprehensive market analysis across all time horizons |
| 38 Technical Indicators | Built-in indicators plus custom options | Advanced technical analysis capabilities |
| Expert Advisors | Algorithmic trading robots | Automate trading strategies 24/7 |
| Market Depth | View buy/sell orders at different price levels | Better understanding of market liquidity |
| Economic Calendar | Built-in economic event tracker | Stay informed about market-moving events |
Platform Selection Tip: Start with DTrader if you're new to Deriv or prefer simple, quick trading. Graduate to Deriv MT5 or Deriv X as you develop more advanced trading strategies or require more sophisticated charting tools. Use DBot exclusively for automated trading strategies.
Deriv Account Types & Features
Deriv offers multiple account types with different features, minimum deposits, and trading conditions. Understanding these options helps you select the account that best matches your trading style and experience level.
Account Type Comparison
| Account Type | Minimum Deposit | Available Platforms | Leverage | Best For |
|---|---|---|---|---|
| Demo Account | $0 (Virtual $10,000) | All platforms | Up to 1:1000 | Practice, strategy testing |
| Standard Account | $5 | DTrader, DBot, SmartTrader | Up to 1:1000 | Beginners, synthetic trading |
| Deriv MT5 Account | $5 | Deriv MT5 only | Up to 1:1000 | CFD traders, advanced charting |
| Deriv X Account | $5 | Deriv X only | Up to 1:1000 | Custom workspace enthusiasts |
| Financial Account | $5 | All platforms | Up to 1:1000 | EU-regulated trading |
Account Features & Limitations
Standard Account Features
- Access to synthetic indices, forex, commodities
- No commission on trades (spread-only pricing)
- Available globally with few restrictions
- Maximum leverage up to 1:1000 (varies by instrument)
- $5 minimum deposit makes it accessible to all traders
Financial Account (EU) Features
- Regulated under EU financial authorities
- Enhanced client money protection
- Negative balance protection
- Lower maximum leverage (1:30 for retail clients)
- No synthetic indices available (EU regulation)
Account Currency Options
Deriv supports multiple account currencies to help you avoid conversion fees and simplify your trading accounting.
| Currency | Symbol | Available Payment Methods | Conversion Fee |
|---|---|---|---|
| US Dollar | USD | All methods | None for USD transactions |
| Euro | EUR | Bank transfer, e-wallets | 0.5% if converting from other currencies |
| British Pound | GBP | Bank transfer, e-wallets | 0.5% if converting from other currencies |
| Australian Dollar | AUD | Bank transfer, e-wallets | 0.5% if converting from other currencies |
| Bitcoin | BTC | Cryptocurrency only | Network fees apply |
Currency Selection Tip: Choose an account currency that matches your primary trading instruments or your local currency to avoid conversion fees. For example, if you primarily trade EUR/USD, consider a USD or EUR account. If you're based in the UK, a GBP account might be most convenient.
Synthetic Indices Deep Dive
Synthetic indices are Deriv's signature product - simulated markets that run 24/7 without being affected by real-world events. Understanding these instruments is crucial as they behave differently from traditional markets and carry unique risks.
What Are Synthetic Indices?
Synthetic indices are financial instruments generated by Deriv using a random number generator with a seed from a regulated financial market. They simulate market movements but are not based on actual underlying assets. This creates markets that are open 24/7 with consistent volatility patterns.
Synthetic Index Categories
| Index Category | Examples | Volatility Level | Trading Hours | Key Characteristics |
|---|---|---|---|---|
| Volatility Indices | Volatility 10, 25, 50, 75, 100 | Low to Extreme | 24/7 | Numbers indicate relative volatility (10=lowest, 100=highest) |
| Step Indices | Step Index | Medium | 24/7 | Moves in predetermined increments with occasional jumps |
| Jump Indices | Jump 10, 25, 50, 75, 100 | Medium to High | 24/7 | Frequent price jumps with numbers indicating jump frequency |
| Range Break Indices | Range Break 100, 200 | Low to Medium | 24/7 | Consolidates within ranges then breaks out dramatically |
| Daily Reset Indices | DSMX10, DSMX20, DSMX30 | Low to Medium | 24/7 | Resets to starting point each day at 00:00 GMT |
Synthetic Indices vs Traditional Markets
| Feature | Synthetic Indices | Traditional Markets |
|---|---|---|
| Trading Hours | 24/7 | Market hours only |
| Market Influence | Not affected by real-world events | Affected by news, economic data, geopolitics |
| Volatility Patterns | Consistent, predictable patterns | Variable, unpredictable patterns |
| Liquidity | Unlimited (synthetic) | Limited by market participants |
| Regulatory Status | Not available in EU | Available globally with regulation |
Synthetic Indices Risk Considerations
Important Risk Warning: Synthetic indices are Deriv's counterparty products, meaning you're trading against Deriv, not in a real market. While they offer 24/7 trading and consistent volatility, they also carry unique risks including potential conflicts of interest and the fact that past performance patterns may not continue. These products are banned in the European Union due to regulatory concerns.
- No Real Market Influence: Synthetic indices aren't affected by economic news or real-world events, which eliminates some traditional market risks but also removes fundamental analysis opportunities
- Pattern-Based Behavior: These indices follow mathematical models with specific volatility and jump patterns that can be studied and potentially predicted
- Counterparty Risk: You're trading against Deriv as the counterparty, not participating in a real market
- Regulatory Limitations: Not available to traders in the European Union and some other jurisdictions
- Addiction Potential: The 24/7 availability and game-like nature of some synthetic products may increase risk of overtrading
Forex & CFD Trading on Deriv
Beyond synthetic indices, Deriv offers comprehensive forex and CFD trading on various asset classes including currencies, commodities, and indices. These products provide exposure to real financial markets with their associated opportunities and risks.
Forex Trading on Deriv
| Forex Category | Example Pairs | Typical Spread | Leverage | Trading Hours |
|---|---|---|---|---|
| Major Pairs | EUR/USD, GBP/USD, USD/JPY | 1.2-1.8 pips | Up to 1:1000 | 24/5 (Sunday 21:00 - Friday 21:00 GMT) |
| Minor Pairs | EUR/GBP, AUD/CAD, NZD/JPY | 1.8-2.5 pips | Up to 1:500 | 24/5 |
| Exotic Pairs | USD/TRY, EUR/TRY, USD/ZAR | 3.0-8.0 pips | Up to 1:100 | 24/5 |
Commodities & Indices CFDs
| Asset Class | Examples | Typical Spread | Leverage | Trading Hours |
|---|---|---|---|---|
| Precious Metals | Gold, Silver | 0.35-0.50 | Up to 1:500 | 24/5 |
| Energy | Crude Oil, Natural Gas | 0.04-0.08 | Up to 1:100 | 24/5 |
| Stock Indices | US 30, US 500, UK 100 | 1.0-2.5 | Up to 1:100 | Market hours |
| Cryptocurrencies | BTC/USD, ETH/USD | 60-150 | Up to 1:100 | 24/7 |
CFD Trading Mechanics on Deriv
Example: CFD Trade on Deriv
Instrument: EUR/USD
Position: Buy 0.1 lots (10,000 units)
Entry Price: 1.1050
Spread: 1.6 pips
Initial Cost: 10,000 × 0.00016 = $1.60 (spread cost)
Exit Price: 1.1070 (20 pip gain)
Profit: 10,000 × 0.0020 = $20.00
Net Profit: $20.00 - $1.60 = $18.40
Trading Consideration: Deriv offers competitive spreads on forex and CFDs, but remember that these are derivative products. You don't own the underlying asset, and your profit/loss comes from price differences. Always consider swap rates (overnight financing) for positions held beyond one day.
Cryptocurrency Trading on Deriv
Deriv offers cryptocurrency CFDs, allowing traders to speculate on price movements of major digital currencies without owning the underlying assets. These products combine the volatility of crypto markets with the leverage and accessibility of CFDs.
Available Cryptocurrency Pairs
| Cryptocurrency | Symbol | Typical Spread | Leverage | Contract Multiplier |
|---|---|---|---|---|
| Bitcoin vs US Dollar | BTC/USD | 85 pips | Up to 1:100 | 1 |
| Ethereum vs US Dollar | ETH/USD | 2.5 pips | Up to 1:50 | 1 |
| Litecoin vs US Dollar | LTC/USD | 0.8 pips | Up to 1:50 | 1 |
| Ripple vs US Dollar | XRP/USD | 0.1 pips | Up to 1:50 | 1 |
| Bitcoin Cash vs US Dollar | BCH/USD | 2.0 pips | Up to 1:50 | 1 |
Crypto Trading Hours & Specifications
Trading Hours
Cryptocurrency CFDs on Deriv are available 24/7, reflecting the continuous nature of crypto markets. There are no market closures on weekends or holidays.
Margin Requirements
Margin requirements vary by cryptocurrency and leverage. For example, with 1:10 leverage on BTC/USD, you need 10% margin. With 1:100 leverage, only 1% margin is required.
Swap Rates
Cryptocurrency positions held overnight incur swap rates. These vary by instrument and direction (long/short) and are typically higher than traditional forex swaps.
Volatility Considerations
Cryptocurrencies are extremely volatile. A 10-20% daily move is not uncommon, which can lead to rapid gains or losses, especially when using leverage.
Crypto Trading Risk Warning: Cryptocurrency CFDs are extremely high-risk products. The combination of inherent crypto volatility with CFD leverage creates a high probability of significant losses. Price gaps can occur, especially on weekends when traditional markets are closed. Never risk more than you can afford to lose completely.
Deriv Trading Tools & Indicators
Deriv provides a comprehensive suite of trading tools and technical indicators across its platforms. Understanding these tools is essential for effective market analysis and trade execution.
Technical Indicators Available
| Indicator Category | Available Indicators | Best For | Platform Availability |
|---|---|---|---|
| Trend Indicators | Moving Averages, MACD, Parabolic SAR, Ichimoku Cloud | Identifying market direction | DTrader, Deriv MT5, Deriv X |
| Momentum Indicators | RSI, Stochastic, Williams %R, CCI | Identifying overbought/oversold conditions | DTrader, Deriv MT5, Deriv X |
| Volatility Indicators | Bollinger Bands, ATR, Standard Deviation | Measuring market volatility | Deriv MT5, Deriv X |
| Volume Indicators | Volume, OBV, Money Flow Index | Confirming price movements | Deriv MT5, Deriv X |
| Bill Williams | Alligator, Fractals, Gator Oscillator | Advanced trend analysis | Deriv MT5, Deriv X |
Charting Tools & Features
Multiple Chart Types
Candlestick, bar, line, Heikin-Ashi, Renko, and point & figure charts available.
Drawing Tools
Trend lines, Fibonacci retracements, channels, shapes, and text annotations.
Timeframe Selection
From tick charts to monthly timeframes depending on the platform.
Chart Templates
Save and load chart layouts with preferred indicators and settings.
Trading Calculators & Tools
Pip Calculator
Calculate pip value for different instruments and position sizes to manage risk effectively.
Margin Calculator
Determine required margin for planned trades based on instrument and leverage.
Profit Calculator
Estimate potential profits and losses for planned trades before execution.
Swap Calculator
Calculate overnight financing costs for positions held beyond one day.
Deriv Bot & Strategy Builder
Deriv Bot is a visual programming tool that allows traders to create, test, and deploy automated trading strategies without coding knowledge. This powerful tool can execute trades 24/7 based on predefined conditions.
Deriv Bot Key Features
| Feature | Description | Benefit |
|---|---|---|
| Visual Block Interface | Drag-and-drop blocks to build strategies | No programming knowledge required |
| Predefined Strategy Blocks | Ready-made blocks for common strategies | Quick strategy development |
| Backtesting Capability | Test strategies on historical data | Validate strategy effectiveness before live use |
| 24/7 Automation | Run strategies continuously | Never miss trading opportunities |
| Risk Management Blocks | Built-in risk controls and money management | Automated risk management |
Common Deriv Bot Strategies
Martingale Strategy
Doubles position size after losses to recover previous losses with a single win. High risk - can lead to significant losses during extended losing streaks.
Oscillator Strategy
Uses RSI or Stochastic indicators to identify overbought/oversold conditions for mean reversion trades.
Trend Following Strategy
Uses moving averages to identify trend direction and enter trades in the direction of the trend.
News Trading Strategy
Places trades around scheduled news events based on volatility expectations (not available for synthetic indices).
Automated Trading Risk Warning: Automated trading carries significant risks. Strategies that appear profitable in backtesting may fail in live markets. Always test strategies thoroughly in demo mode before using real money. Monitor automated strategies regularly as market conditions can change, rendering previously effective strategies unprofitable.
Frequently Asked Questions
Is Deriv suitable for beginners?
Deriv offers user-friendly platforms like DTrader that are accessible to beginners, but the complexity of synthetic indices and availability of high leverage require careful education and risk management. Beginners should start with demo accounts, focus on platform familiarity, and thoroughly understand risk before considering live trading.
What are the costs of trading on Deriv?
Deriv primarily uses a spread-only pricing model with no commissions on most accounts. Costs include spreads (which vary by instrument), overnight financing charges for positions held beyond one day, and potential currency conversion fees if your account currency differs from your trading instruments. There are no inactivity fees.
Can I use Deriv in the United States?
No, Deriv does not accept clients from the United States due to regulatory restrictions. The platform is unavailable to residents of several other countries including Canada, Hong Kong, and some European nations for certain products. Always check Deriv's terms of service for the most current availability information.
What makes synthetic indices different from traditional markets?
Synthetic indices are simulated markets generated algorithmically, not based on real underlying assets. They trade 24/7, are unaffected by real-world events, and follow mathematical models with consistent volatility patterns. This creates different risk profiles and trading opportunities compared to traditional markets.
How does Deriv Bot work?
Deriv Bot is a visual programming tool that allows you to create automated trading strategies using drag-and-drop blocks. You can define entry/exit conditions, risk parameters, and trading rules without coding knowledge. The bot can then execute trades automatically 24/7 based on your strategy.
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