The Martingale strategy is a betting strategy that originated from and became popular in France during the eighteenth century. This was before the introduction of the lottery as we know it today, according to sportwettenanbieter.com/lottowelt-erfahrungen, a lotto broker based in Hamburg. The strategy, in its simplest form, is designed for a game in which the gambler tosses a coin. People bet on heads or tails. For example, if the coin comes up heads, they win their stake. If it comes up tails, they lose.
Those who follow the Martingale strategy double their bet after each loss. Therefore, the first win would recoup all previous losses, and would also win a profit equal to the first stake.
In casinos, people apply the Martingale strategy to the roulette wheel. According to sportwettenanbieter.com, an online sports betting website, the Martingale strategy is ‘partially suitable’ for sports betting.
The Martingale strategy – forex trading
When forex traders use the Martingale strategy, they call it the ‘Martingale Trading System.’
According to Earnforex.com, the strategy is a sure-fire thing for people or firms that have an infinite amount of money. With an infinite number of buy orders, for example, you will eventually score a win. When you do, if you doubled the amount you put in after each loss, you would recoup all your losses and also gain your original investment.
Earnforex.com offers the following opinion and conclusion regarding using the Martingale Trading System:
“The problem is that no trader possesses an infinite wealth and thus utilizing this strategy eventually leads to a wiped account.”
“Although it’s a very popular forex trading system and is used in many paid forex expert advisors, I strongly don’t recommend trading with it.”
The term Forex is short for the Foreign Exchange market.
Martingale trading system
If you had unlimited funds for forex trading, the following would be a sure way of making money:
- Use any pair of currencies and time-frames.
- You must determine your basic position size.
- Place a buy or sell order in a random direction with some fixed SL (stop-loss) and the same TP (take-profit).
- After triggering the SL or TP, you are either a winner or a loser.
- If you win, congratulations! Now, go back to step 3 and continue.
- If you lose, what a pity! Anyway, now double your position and go to step 3 and continue.
- If your trading account balance is limitless, you will eventually win a lot of money. If your account balance has a limit, you will probably eventually lose your money.
Nathan Tucci, a trader whose techniques are based on mathematics, said the following regarding the Martingale strategy in forex trading:
“With the Martingale system, no matter how long the bad streak is when you finally win it is profitable overall. The problem with Martingale is – as you probably noticed – the risk is MASSIVE!”
“A lot of people say that Martingaling is foolish, and believe me, I understand where they are coming from. However, I do beg to differ.”