The young Reds lost their first league game of the season last weekend when a late penalty meant a 2-1 home defeat at the hands of Stoke City.
That setback followed losses in the Premier League Cup and FA Youth Cup, and Gerrard wants his charges to stand tough and show their quality against the Blues in response.
“It’s a tough time at the moment after three defeats on the spin, which is not what I’m used to and what the group is used to, so it’s a good challenge for us and a good test,” he told Liverpoolfc.com.
“We’ve spoken to the players and told them to stand up and be counted when times are tough and we don’t want anybody hiding.
“We have told them to take responsibility yourself first and foremost, and try and help other people around you, and can we find the performance to stop the rot, if you like, which is what I’m looking for.
“The signs have been good in training but we’ve got to be careful we don’t leave it on the training ground.
“In my experience of derbies, even going back to games I played at youth level, form goes out of the window and you always know the first 10 to 15 minutes is going to be a battle and it’s going to be frantic.
“Everton will pressure us and come and press and we expect them to come out of the blocks quick, but we know we have got the quality to hurt them and we have proved that before.
“My players can’t be shocked if they find themselves being pressed by three or four Everton players at any one time. They have to enjoy it, stand up, bring it on, don’t go shy and go in your shell and take that responsibility of playing in a Merseyside derby.”
Back in September, the young Reds produced a memorable display as they came back from a goal down to conquer their neighbours in Kirkby.
“We were absolutely magnificent when we beat them 3-1 and we know they were hurt by that,” added Gerrard.
“We know they have been watching us and our system and the way that we play.
“We didn’t deserve to be a goal down before we came back to win.
“I thought we handled their direct play well early in the game but, to be fair to Everton, they scored a decent goal through Anthony Gordon, who is an excellent player, and we’ll have to watch him if he plays.
“In general it was one of our strongest performances of the season. It was an excellent result and you saw the celebrations from the team because they know what they are going to get out of the game if they play right because us at full tilt, if we perform well we can beat Everton.”
One key figure on Saturday, selection permitting, could be forward Rafael Camacho.
The Portugal youth international has enjoyed a fruitful season so far under Gerrard, netting 11 goals for the U18s, including a first ever hat-trick at the turn of the year against Blackburn Rovers.
The former Liverpool captain believes Camacho has a lot of natural ability, but pinpointed the work he needs to do in order to reach the next level as a player.
“His numbers that he has delivered for the U18s have been really strong in terms of assists and goals,” he said.
“He is an individual player. He is a skilful player who likes to get on the ball and we are trying to improve the other side of Rafa’s game to be a team player, work hard, press when you haven’t got the ball.
“We know he’s got a lot of technical ability but we are trying to put a lot of other things around his game.
“He’s working hard at it and he’s learning and improving all of the time, and we are hoping he will be available for us at the weekend.”
Going into the latest round of fixtures, things are tight at the top of the U18 Premier League.
Gerrard’s second-placed side are four points behind leaders Manchester United but have a game in hand. Everton are in fourth place on the same amount of points as the Reds, who have a better goal difference.
With nine games to go, the boss knows the title race could go right down to the wire.
“We said to the players, ‘can you be in it with around 10 games to go and we are in the mix?’,” said Gerrard.
“I think whether we can challenge [for the title] will depend on the availability of our top players.
“If Critch [Neil Critchley] takes four or five of the lads for the U23s it will affect us, but I understand the situation and that’s how it works.”