Inside Trade | The Martingale trading strategy

A very risky but rewarding strategy. Gamblers are quite familiar with this strategy and the halls of casinos in Las Vegas had been witness to this before. Its power is enough to corner the casinos in puttin a ceiling in their minimum and maximum bet. The only question is, if you have the power to wield it, I mean you're pocket.

The Martingale system was introduced during the 18^th century by a french mathematician namely Paul Pierre Levy and was further researched by an American mathematician named Joseph Leo Doob, who wanted to disprove the possibility of it being a 100% profitable betting strategy. This strategy was based on the premise of “doubling down”.

The main idea was once your initial bet loss had incurred, you would double it on your next bet and keep doubling it until such time that one winning bet would compensate for all the losses. This strategy is 100% profitable as long you have the capital to support your bet and there are only two possible outcome. The trick is that you must not change direction because both of the direction had an equal probability to turn out. But sometimes traders run out of capital before gaining profit or even returning their losses.

In Forex, there are some few additional things that are needed to be taken into consideration.;

The Stop-Loss. Unlike gambling wherein you're just be in either the winning or losing side. In Forex there are such things as Temporary loss. A loss when an open position is had incurred but may be turned into profit after a while. If you're balance greatly decreases and hits the stop-loss then you are really in deep trouble. You're balance should at least be sufficient enough to withstand more than 5 sequential movement.

The upward or downward movement of the rate. Currency movement goes by trend and if you're are in the wrong direction, better braise yourself because you it would keep on one direction for quite sometime and hope that you don't ran out of available funds for new trades. It would also be difficult to handle once more than 1 lot is opened.

You must also be psychologically ready- imagine repeatedly doubling your position while losing, and watching you're account depleting rapidly just before your eyes.

A friendly reminder, If you think you can't handle it then don't start it.