Martingale strategy: simple and complex variants

In case you missed the math in the previous article, let's summarize:

The simple Martingale variant. You opened a trade in the trend, but the trade closed on the correction in a loss - you open a trade with double the lot in the trend until the next trade closes on the plus side. What series of losing trades the deposit will withstand depends on its amount and the length of stop-loss on which the losing trades are closed.

A complex variant of Martingale. You select the coefficient of increase of position volume through mathematical calculations, based on the following input data: the deposit amount, the volume of the initial transaction, the estimated level of stop and take profit, the risk limit values per transaction as a percentage of the deposit balance, the average value of losing trades in a series.

In a complex variant, Martingale may be complemented by the pyramiding algorithm or replaced by a reversal.

Who is suitable for the Martingale strategy?

Trading with the use of Martingale suits the following category of people:

• Gambling traders for whom trading is a game. Such people are not worried about possible losses - they enjoy the process itself.
  
  
• Traders who aim at boosting their deposits. Martingale allows you to increase your deposit faster in comparison to conservative strategies. It is enough to increase the deposit by 2 times (breakeven level) in order to reduce the psychological burden.
  
  
• Professional traders, including those using Expert Advisors. With a reasonable mathematical approach to the Martingale algorithm, it is possible to make the strategy more effective with relatively small risks. Roughly speaking, with a 10% increase in risk, the strategy's profitability can be increased by 25%.

Martingale is not recommended to novice traders who do not know the mathematical apparatus, long-term investors, and traders who are painfully reactive to losses and poorly control their emotions.

Is there a "safe Martingale"?

"Safe Martingale" does not exist. No matter how much you insure your trades, no matter how sure you are of a positive result, there is no guarantee of 100% success on an open trade. And that means that at any time you could lose double your bet. On the other hand, a double bet can work out and bring in double the profit. Therein lies the risk of Martingale trading.

In the following article, we'll look at how to reduce the risks of the Martingale strategy.

Also, if you want to use all available trading tools to increase your capital as soon as possible - follow this link below, or contact us via live chat. Our experts will help you to choose the best strategy for success.