Hedging Digits In Deriv

Kadima Traders
Aug 24
9 min read

computers showing the Deriv trading platform

Let’s talk about a strategy that sounds super fancy but is secretly a lifesaver for traders — hedging.

If you’ve ever screamed at your screen after a loss and thought, “Couldn’t I have predicted that?”, then this guide is for you.

What is Hedging?

In trading, hedging means placing trades in opposite directions or placing trades of two or more correlated assets or market movements simultaneously so that if one loses, the other can win (or at least reduce your net loss).

In Binary Trading ( within Deriv ), hedging means switching between two related contract types for example “Even” and “Odd” or “Over” and “Under” or "Matches" and "Differs" contracts to balance your exposure. Think of it as flipping the trade direction strategically, not randomly — trying to catch the market either way.

But here’s the problem with most hedging attempts:

❌ They’re too slow. ❌ They miss tick data. ❌ They switch late or after the market already changed.

And this is where Kadima AI Trading Software comes into play

How Does Hedging Work With The Kadima AI Softwares?

The Kadima AI Trading Software isn’t just some random bot throwing trades Nope!

We built this tool with one goal: make smarter trades with built-in risk control, and hedging is a big part of that.

With our Hedge Mode toggle, you can enable automated alternation between Over and Under or Even and Odd, depending on your contract type.

Here Is How It Works

Even/Odd

Let’s say you’re trading Digits – Even/Odd.

You enable Hedge Mode.
Kadima AI places a trade on “Even.”
Win or lose, the next trade automatically flips to “Odd.”
Rinse, repeat — you're alternating between Even and Odd each round.

Example 1: Mixed Market ( starting with Even )

👉 Sequence: O O E O E O E E E E E O

Alternating hedge produces 9 wins, 3 losses
Without hedging (sticking to Odd only), you’d have 5 wins, 7 losses

Here, hedge mode catches both sides, smoothing out results.

Example 2: Long Streak (Dominant Side)

👉 Sequence: O E E E E E E E O E O E

Even if we started trading Odd and Hedging Mode was on, we would incur 8 wins and 4 losses which would still put us net profitable
Without hedge (sticking only to Odd), results: 3 wins, 7 losses

Key Insight:

Even if the market heavily favors one side (like a long streak of Even), using hedge mode can still help you ride out those long streaks and be in profit.
In conditions (where Even/Odd flip around), Hedge Mode minimizes risk of wipeouts when the streak suddenly breaks.

✅ Takeaway: Hedging isn’t about chasing perfection on streaks — it’s about protection against unpredictability. It balances your exposure so you don’t get crushed by sudden flips.

Over/Under

If you’re trading Over/Under contracts, hedging gets a little spicier. Unlike Even/Odd where it’s a straight coin toss, here you’re juggling two things:

Your contract type (Over or Under)
The specific digit you’ve chosen

So what does that mean in practice?

Well, Deriv gives you 9 different digits (0–9) to trade with on Over/Under contracts. Each one has a different payout because the probability changes depending on the digit. For example, selecting Over 2 doesn’t give you the same payout as Over 8, because naturally, rolling higher numbers is less common the closer you get to 9. This means that you will get higher payouts for numbers that are less likely to occur and lower payouts for numbers that are more likely to occur

👉 But here’s where it gets fun: the payouts aren’t random — they’re correlated. That means some Over choices and some Under choices actually share the exact same odds. This is where hedging becomes powerful, because you can take advantage of those correlations to reduce your risk exposure while still staying in the game.

Here’s a quick look at how the digits line up in terms of payouts:

Digits Over	Digits Under	Typical Payout %	Recommended Martingale Based on Payout
0	9	9.6%	14.0
1	8	23.2%	6.50
2	7	40.4%	3.25
3	6	63.40%	2.75
4	5	95.30%	2.25
5	4	142.70%	1.80
6	3	220.50%	1.60
7	2	371.70%	1.30
8	1	792.90%	1.10

Notice the symmetry? Over 2 and Under 7 are basically the same trade — they pay out similarly, just inverted. That’s why hedging works so beautifully here: if your Over side gets smacked, your Under hedge is positioned to pick up the slack.

Take for example a market that has this Sequence of Digits 11652195624 and you were hedging trading starting with Over 2 meaning its hedge option will be Under 7 ---- The software will alternate between these two options on every tick. From our example your win and Loss sequence will be 11652195684 meaning you have incurred only 3 losses ( all which have been recovered by the martingale ) and 8 wins thereby putting you net profitable on this trade.

And when you throw Kadima AI Trading Software into the mix (which doesn’t miss any ticks), this hedging strategy becomes very viable and a potent way to quickly compound your account. The software instantly balances these mirrored trades, and with the Martingale option, it keeps you riding through the streaks like a pro trader.

Why Does This Matter?

Markets go through biases and streaks, but sometimes they just don’t give a clear signal. You’re staring at your screen like:

“Hmm... 5 Evens in a row. Should I keep going with Even or switch?”

Instead of guessing, hedging lets you ride the wave in both directions. You’re positioning yourself to profit regardless of which side breaks out.

When Should You Use Hedge Mode?

Hedge Mode works best when:

📉 There’s no strong signal from the pattern analysis or parity strength.
🤷 Market feels unpredictable, and you just want to survive a weird patch.
🔁 You want to build a Martingale strategy that flips between contracts to avoid streaks burning you.

In fact, some traders use hedging exclusively as part of their Martingale risk control, so the software flips direction instead of repeating the same type of trade and racking up losses in a row.

Pro Example: Smart Hedging in Action

Let’s say you’re trading Even/Odd with these settings:

Stake: $0.35
Martingale: 2.25x
Hedge: ✅ Enabled

Here’s how a session might go:

Trade	Contract	Result	Next Contract
#1	Even	❌ Loss	Odd
#2	Odd	❌ Loss	Even
#3	Even	✅ Win	Odd

Instead of stacking losses on the same side, you're distributing risk while still climbing the Martingale ladder. If one side wins, you recover both losses and profit — without spiraling.

How to Enable Hedging in Kadima

Head to the Kadima Traders Software.
Under Settings, look for the Hedge toggle which is usually under the contract type that you are trading.
The Hedge Toggle In The Kadima Traders Software
Turn it ON. ( It is Off by Default)
Save your settings and start your trade and let the AI flip contracts for you while maintaining Martingale progress and session tracking.

Kadima Traders Software

💡 Pro Tip (Read Carefully – This is Important!)

When you enable Hedge Mode, the option you currently have selected is always your starting point.

If you’re on Even/Odd → and you had Odd selected, your first trade starts on Odd, then alternates automatically (Odd → Even → Odd → Even …). If you had Even selected, it starts on Even and flips from there.
If you’re on Over/Under → and you had Over 3 selected, your first trade is Over 3, then the system flips to its paired hedge (Under 6 → Over 3 → Under 6 …). If you had Under 7 selected, it kicks off on Under 7 and alternates with Over 2.

This way, you control the initial bias (where the first trade starts), and Kadima AI takes care of the hedge sequence that follows — keeping you in sync with digit correlations and streak protection.

✅Why this matters

Your starting point decides whether you begin in sync with the current market streak or against it. In long streaks (e.g., multiple Evens in a row), starting on the wrong side can mean you take the early hits before Hedge Mode catches up.

🎯 Simple Strategy

Before enabling Hedge Mode, quickly check the Pattern Analysis (The Kadima AI Analysis tool shows streaks and frequency trends). If the market has been dominated by Evens, it may be smarter to start on Even so you’re aligned from the first trade. Same goes for Over/Under pairs — let the pattern guide your first step, and Hedge Mode handles the rest.

Why Hedging Works So Well With Kadima Software

Let’s get real — in tick trading, speed is survival. If your software delays or freezes even by a few milliseconds, you’re toast. But Kadima doesn’t play that game.

Here’s why hedging works flawlessly with Kadima:

✅ No missed ticks – Kadima eats every tick live as it happens. Other bots take naps in between. Not this one.
✅ Instant switching – If your last trade ends in a loss, the software flips the contract type (Even/Odd or Over/Under) immediately, riding the trend or reversal.
✅ Martingale + Hedge? Yes, please. – Martingale helps you recover losses. Hedging keeps your trade logic adaptive. Combined? You’re built like a tank.
✅ Fast execution logic – Kadima isn’t laggy. It’s optimized to place the next trade in real-time, so you don’t miss your recovery point.

So What Does This Mean for You?

When you hedge with Kadima, you’re basically:

Riding out losing streaks without panicking.
Letting the AI adapt contract types while you sit back.
Using Martingale only when it’s logical, not emotional.
Winning back-to-back without changing your entire system manually.

And because it’s all built in — you don't have to do the mental gymnastics. Just toggle Hedge ON, pick your trade setup, and let the software do the dancing. Ready to take your trades to the next level?

Start Hedging With Kadima

Risk Management While Hedging

The whole point of hedging is not to gamble blindly, but to survive losing streaks while positioning yourself for recovery. This is where risk management rules come in:

1. Stoploss by Consecutive Losses

Instead of setting your stoploss in dollars only, you set it by the maximum consecutive losses you’re willing to tolerate.

For Even/Odd contracts: A practical range is 5–6 consecutive losses.
For Over/Under contracts: A tighter range works best, around 4–5 consecutive losses.

This gives you structure — you know exactly when to stop before a losing streak eats too much of your balance.

2. Take Profit (TP) Aligned with Your Stake

Your TP should always match or slightly exceed your initial stake level.

Example: If you start with $1 stakes, your TP could be $5–$10 per cycle.
This ensures that after winning back from a hedge or Martingale step, you lock in gains instead of chasing endlessly.

3. Controlled Martingale Use

Martingale in hedging isn’t about “doubling forever.” It’s about recovering within your chosen loss window.

On Even/Odd: Martingale kicks in gradually across 5–6 levels max.
On Over/Under: Shorter depth (4–5 levels max) to avoid deep drawdowns.

By combining these three rules:

Consecutive loss stop = limits how far you hedge.
Take profit matching stake = ensures consistency.
Martingale depth tied to contract type = keeps recovery logical.

FAQs

What is hedging in Deriv digit trading?

Hedging is a way of managing risk by taking positions that balance each other out. Instead of betting blindly, you create a structured plan (e.g., alternating Even/Odd or Over/Under) to protect your account against long losing streaks.

Why use consecutive losses as a stoploss instead of a fixed money value?

Because digit contracts are streak-based. Setting a stoploss in terms of “maximum consecutive losses” (e.g., 5–6 for Even/Odd, 4–5 for Over/Under) aligns directly with the market’s behavior. It prevents emotional chasing and gives you a natural exit point.

How does martingale fit into hedging?

Martingale is not about doubling infinitely — it’s about recovering within your chosen loss window. You scale your stake only across the number of losses you’ve allowed yourself. Once the streak breaks, you recover and reset back to the base stake.

How should I set my Take Profit (TP)?

Your TP should align with your initial stake size, not just a random profit target. Example: If you start with $1 stakes, aim to close the cycle at around $5–$10 profit. This locks in gains consistently without exposing you to unnecessary risk.

Which is riskier, Even/Odd or Over/Under?

Even/Odd usually allows a deeper loss window (5–6 levels), meaning slightly less volatile.
Over/Under tends to be sharper and riskier, so a smaller window (4–5 levels) is safer.

What if I hit my max consecutive loss stop?

You stop trading and wait. This is the essence of discipline. Hedging is about capital preservation, not chasing. If the streak extends beyond your window, it means the market is in an unusual phase — and that’s a red flag to step aside.

Can I combine Even/Odd and Over/Under hedges?

Yes, advanced traders sometimes rotate between the two. For example, if Even/Odd shows long streaks, switch to Over/Under with a smaller window. The key is to always respect your stoploss rules when rotating.

How do patterns help in hedging?

Patterns give context. If you see 4 odds in a row, hedging into an Even position makes sense — but you only commit knowing your risk window. Pattern analysis tells you when to enter, while hedging + stoploss control tells you how to survive if it goes wrong.