Martingale (Martingale).

This term can be found both in gambling and in Forex trading. There are many disputes and discussions surrounding this system of making transactions, but what exactly is Martingale?

Martingale (Martingale) is a capital, money or investment management system in which, after receiving losses, the amount of investment only increases.

This work strategy is closely related to the theory of probability; it is assumed that a trader or player cannot constantly enter into only unprofitable transactions; sooner or later, luck will turn its face to him anyway.

If Martingale is used in relation to trading in a casino, then everything is simple - you bet, lose, increase your bet and again wait for the result of the game.

There are some nuances when working on Forex, which we will talk about later. Firstly, it should be noted that Martingale is one of the riskiest strategies in Forex and it is better to use an alternative trading option, the so-called Anti-Martingale .

The essence of the Martingale strategy.

As noted earlier, the entire strategy is built on a gradual increase in the volume of transactions; this approach allows you to compensate for previously received losses at the expense of the profit on the last transaction.

That is why when trading using martingale, two main parameters should be taken into account: the size of the available deposit and the volume of each subsequent transaction. At the same time, it is not at all necessary to double the amount of each subsequent order; it is quite enough to increase its size so that it covers previous losses.

The essence of this strategy can be understood more clearly using a specific example -

Number of transactions and deposit - own funds should be distributed so that they are enough for at least 4-5 orders.

If you have $100 in your account, then open the first order for $10.

If the losses on it reach $2, the deal is closed, and a second order is opened taking into account previous losses, for example, in the amount of $12. After the second transaction went into a loss of $3, we now take into account the volumes of the first and second orders, that is, the third order will be $25 in size.

If you wish, you can use a simpler trading system, with which you will double each subsequent transaction.

That is, the first order is 10 dollars, the second order is 20 dollars, and the third is 40 dollars, and so on. In this case, it will be easier for you to distribute your available capital. Direction of trade - all orders are opened in different directions, it is assumed that you simply did not guess the direction of the trend the first time and now you will have better luck.

Closing unprofitable positions - it is clear that it is not at all necessary to lose the entire deposit; each trader independently sets his own level of losses. It usually ranges from 10 to 20 percent of the transaction amount, but not the deposit.

The Martingale strategy has a rather controversial effectiveness, but perhaps it will bring you decent profits on Forex. Other Forex strategies http://time-forex.com/strategy can be found at this link.