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What is Martingale Strategy
The Martingale strategy is one of the most popular trading strategies that was introduced in betting to overcome previous losses. If you are trading for a while you must have surely heard about this strategy and risk the involved in this strategy. In this strategy, you need to double your investment amount in order to overcome the previous losses.
The main idea behind this strategy is that you cannot statistically lose every time and even after three or four loss you are most probably gonna win the last one.
How does the Martingale Strategy work?
Martingale Strategy: Invested amount * 2 +1
As said above, the Martingale system was developed to overcome previous losses and you need to double your investment amount in case the first one resulted in a loss.
For instance, your first trade was $ 10 and suppose it was a loss now according to the martingale rule your second trade will be of $21 ( 10*2 +1) . even, if the second one is also a loss your third trade should be of ($21 * 2+1) $ 43, and so on until your trade results in profit and by this way you will recover all the previous losses and restart with $10 as your new trade.
I hope you have found this article helpful. Try this trading strategy on Olymp Trade. Join Olymp Trade today and get $10, 000 for free.
- Martingale is a popular betting and trading strategy which was initially used by traders to overcome their previous loss
- This trading was introduced by Paul Lavy in 1934. However, to the Western world, the trading strategy was originally introduced by Ville in 1939.
- In this strategy, you need to double your stake or investment amount after you lose each bet and trade
- The strategy relies on the assumption that eventually, you are going to win after two or three losses.
Pros and Cons of Martingale Calculator
- Helps in recovering your previous losses
- Tested Money Management Strategy
- May Increase your profit potential
- Can be highly profitable if used with proper Money Management
- Highly Risky
- Does not guarantee profit
- Can eat your hard money within minutes