Martingale Strategy review: is it gambling or not?
The strategy of Martingale is based on a simple doubling of previous transaction amount in case of an unsuccessful outcome until winning. The profit covers all previous losses to 90% of amount of the initial minimum bet (in case of binary options).
Martingale Method is a risky strategy, because at some point you may risk all your deposits. In addition, Martingale is a strategy based solely on mathematics and has nothing to do with technical analysis and indicators.
The advantage of Martingale method lies in opportunities to trade without the need to be able to analyze the market. You can simply trade “at random”, deciding where the price will unfold randomly, because with this method of taking decision to enter the market the probability does not change every time and amounts to 50/50.
However, it is the best to combine the Martingale method with trend trading strategy, which will increase the expectation of the projected results.
It is better to make bets and to rely only on the direction of trend. In view of a downtrend the price has a feature to “fall” below all by itself. Trading with Martingale method in a sideway trend could be detrimental to your account.
So what is the best about Martingale method in binary options? It’s simple. This method of trading binary options is that the trader selects the initial bet. For example, this rate will be equal to $1. In case of the result “in the money”, the trader is betting that amount again. However, if the option closes “not in the money,” the trader increases subsequent rate so much, so that in case of the option closure with plus, profit from this option covers the previous loss.
Also, it should be noted that the use of Martingale on binary options is generally extended to turbo options.
In conclusion, we would like to note that the use of this method when trading in binary options is possible, but only if you have good trading ideas. Yes, perhaps, there is a risk of large losses, but no one prohibits learning any trading strategy first and only then calculating how much risk you get trading in a certain way on your own.
Traditionally we wish you good luck and good profits!
– The key to trading systems based on Martingale – is the existence of interrelation between the transactions
– If there is a proven strategy, a series of losing trades will occur less frequently, and as a consequence, you will be able to make a profit
– Market transparency. The market is transparent and quotations are given at a real-time. Therefore, the broker cannot guess or fake the result of the transaction against the exposed rate like all casinos sin
– There is no limit in the amount of lot. If the casino limits the size of bets, there are no restrictions on a foreign exchange market. You can double the bet as much as you want (and if you have enough money).
– Martingale as a money management strategy is not too rational
– To increase the efficiency of Martingale a trader should bet on a series of 4-5 losses in a row, no more than that. Otherwise, the whole thing makes no sense.
- a small part of the total capital (5-10%) must be used for this method
- when the deposit increases 2-3 times, it is reasonable to withdraw part of the profit
- for effective work of money several different Martingale systems on one deposit should be used
That’s all for now. Got any questions? Just ask the expert!