How the Labouchere Strategy Works on Deriv
Labouchere, also called the Cancellation system, sets each stake from a list of numbers. Wins cross numbers off, losses add one.
How Labouchere (Cancellation) works
You start with a list, such as 1, 2, 3. Each stake is the first number plus the last. When only one number is left, you stake that number.
A win crosses off the first and last numbers. A loss adds the stake you just lost to the end of the list. When the list is empty, the cycle is complete and you start a new one.
The rules
- Start with the list 1, 2, 3.
- Stake = first number + last number (or the single remaining number).
- Win: cross off both ends.
- Loss: add the lost stake to the end of the list.
- Empty list: start a new cycle.
A worked example
| Trade | Result | Stake (USD) | List after trade |
|---|---|---|---|
| Trade 1 | Loss | 40.00 | [1, 2, 3, 4] |
| Trade 2 | Loss | 50.00 | [1, 2, 3, 4, 5] |
| Trade 3 | Win | 60.00 | [2, 3, 4] |
| Trade 4 | Win | 60.00 | [3] |
| Trade 5 | Loss | 30.00 | [3, 3] |
| Trade 6 | Win | 60.00 | [1, 2, 3] |
Labouchere starting from the list 1, 2, 3 (10 USD unit). The list is shown after each trade. An empty list restarts at 1, 2, 3.
Risks to understand
Lists can grow
Every loss lengthens the list and raises future stakes, so a long losing run can become expensive.
Complex to track by hand
An assistant follows the list for you, but you should still check where it stands before you step away.
No edge
The list changes your stake sizes, not the odds of a trade.
Using Labouchere (Cancellation) in Tradely
Choose it from the Progression Strategies dropdown in the Trading Panel, then turn on risk management to add a stop loss and take profit. Practice on a Deriv demo account first and review drawdown and largest loss in Trade analytics. No staking plan creates an edge: progressions only reshape how much you stake, not whether a trade wins.
Test Labouchere (Cancellation) on a Deriv demo account before you risk real money.
Get StartedFrequently asked questions
- Why is it called the Cancellation system?
- Because wins cancel numbers off the list. When every number is cancelled, the cycle ends.
- How are Labouchere stakes calculated?
- Each stake is the first number on the list plus the last. With one number left, you stake that number.
Keep reading
- Reverse LabouchereReverse Labouchere flips the Cancellation system: wins add to the list and raise your stakes, losses cross numbers off.
- FibonacciFibonacci stakes follow the sequence 1, 1, 2, 3, 5, 8 and so on, moving forward after a loss and back after a win.
- All strategy guidesCompare every staking strategy in one place.
Risk warning: Trading binary options involves a high level of risk and you could lose your entire stake. Only trade with money you can afford to lose. This page is educational and is not financial advice.