Forex Martingale Strategy

 

Forex Martingale Strategy

Martingale is a management theory of probability that allows future value of something specific in common with the previous period by using the principle of multiplication.

In forex trading, Martingale strategy is a strategy to make a profit while closing total losses of previous transactions through the doubling of capital.

Therefore, when using the martingale strategy on future risk is always increased with increasing losses. This rule is the martingale strategy when you perform a transaction so (n) lot and the result is a loss, then the next transaction using a lot two times that number (2n) .So next anyway. So that when the last transaction profit, then the advantage was able to cover all the losses of the previous transactions.

Examples:

One day you are planning a five-time transactions EUR / USD, stoplloss and target profit of 50 points, as well as the initial capital = $ 50,000.
Using multiple lots martingale strategy.
after the transaction, but the result 4 consecutive defeats and only 1 win in the transaction to five.

Like this:

The first transaction: 1 lot transaction loss x 50 points = - $ 500
The second transaction: 2 lots loss transactions x 50 points = - $ 1,000
The third transaction: 4 lots transaction loss x 50 points = - $ 2,000
The fourth transaction: 8 loss transaction lot x 50 points = - $ 4,000
Fifth transaction: 16 lots of transactions profit x 50 points = + $ 8,000

So that at the end of the transaction the result is:

Total Loss = - $ 7.500
Total Profit = + $ 8,000
Net Profit / Loss = $ 500
Final capital = $ 50.500

Excess use martingale strategy:
Only needs one win in so (n) transactions, to cover all losses from the previous transaction and simultaneously reap the benefits.

Weakness use martingale strategy:
When you are no longer sufficient capital to perform subsequent transaction, your loss is huge.

There is also a mention of this martingale strategy as the system of 99: 1. This means that if we use this strategy then 99% market conditions could make us a profit. but if one day we meet conditions 1%, drop our money.

Therefore, when you want to use martingale strategy, then you have to calculate your capital until resistance keberapa.Dengan transaction so we can better exploit the victory before the final transaction.