What is Martingale?

In probability theory, a martingale is a sequence of random variables (i.e., a stochastic process) for which, at a particular time, the conditional expectation of the next value in the sequence is equal to the present value, regardless of all prior values.

The Martingale system was introduced by French mathematician Paul Pierre Levy in the 18th century.



One school of thought says that if you are only willing to risk 20% of your portfolio then don't expect to gain more than this. A strategy where you could lose all the money in your portfolio is a dangerous strategy and should be avoided. One of that strategy is known as a martingale strategy.

Why Martingale is not a good idea for Binary Options?

Because they are less than 100% you must increase your stake with that in mind so you cover your previous loss and gain a profit equal to the initial trade, otherwise you will end up losing no matter what happens.

Using Martingale, you will simply double up every time you lose in order to cover previous losses. It’s not a strategy, it’s not a decent money management. 

You can however use WINNING Martingale where you can double the amount using the earnings but if you lose, you go back to using proper money management and not double up losses until you have wins. 

For example:

You are trading with $1000 in your account.

After a few successful trades, you make $200, now you have $1200 in your account.

Then you lose some trades and now you have a balance of  $1100.

If your money management was at $50, you can now double the amount using the $100 because if you lose, your account is back to the $1000$. This is where you started.

If you lose this $100 investment however, you should go back to using the $50 per trade investment again and don’t double the amount. 

So this is a type of winning Martingale where you get to double your earnings but not your original balance. But I suggest you keep a low MM, use only 1–3% of your total balance at all times.

So to conclude, everything in this world have some benefits and non-benefits too. If you eat healthy, you will stay healthy. If you eat unhealthy, you may face food poisoning.

If you drive carefully, you reach to your destination safely. If you don't drive safely, you may face accident.

If you use internet wisely, you may learn and gain access to beautiful things in life. If you over use it and may trust anybody writing anything on internet, you may become a part of cyber crime.

If you can control your emotions, you can win in trading and if you can not control, you may lose all of your earnings/savings.

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