Martingale Strategy, the most idiotic strategy when it comes to capital management in trading?

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Martingale strategy, the most idiotic strategy when it comes to capital management in trading?
Martingale strategy, the most idiotic strategy when it comes to capital management in trading?

When trading, managing your money means managing your emotion. You cannot cut loss while trading. You only adjust the money that you invest in your orders so that you can secure your account number. One of the ways that you often hear about is Martingale. People often brag about it as Martingale Strategy.

What is Martingale Strategy?

Martingale is a strategy in which you continuously place order, the more orders you place, the more money you invest. This is a strategy in which you invest more and more money even if you are loss. It means that if you lose, you increase more money to invest in the next order until you win. Of couse if you win, you can also make up for all the money you lost in the last orders as well as winning some profit.

Martingale strategy in Olymp Trade
Martingale strategy in Olymp Trade

Those who play with Martingale strategy have their own reason: it just likes heads or tails. The chance of winning or losing is 50%. Their bet in the first trade is $1. If they lose, the betting money will be raised to $2. If they continue to lose, they will double the betting money for the same choice and continue to do that until they win. the reason is that the probability of continous loss is very low. The first chance to get loss is 50% but it will fall to half in the next trade order. For example: 25% for the second order and 12.5% for the third order. As the chance of loss drops, the money to bet should be increased.

So is the strategy good enough?

All the game about money is such a pain

In theory, you might think Martingale strategy is right. On the aspect of  probability science, yes. Since the probability is 50%, the chance of the same situation happening over again is low.

All the game about money is such a pain
All the game about money is such a pain

However, if you think about it in behaviorism, it’s hard for a person to bear with the strain of increasing his money in the next trading order. In some first trade orders, it’s only 1$-2$-4$-8$ ,…but the more trades is made, the more money have to be placed. That’s when a person feel strained. Players will be anxious and worried. When their sense get controlled by emotion, they will lose all they have.

What is Martingale strategy?
What is Martingale strategy?

Unwise capital management

To be able to use Martingale strategy, you have to keep a stable number in your account. Sometimes, you just need a few orders to win, but sometimes, it take you a lot of orders as well as money to find profit. But the profit after deducting all the expense is just small. This is really unreasonable in economics: Lot of money given, little money earned. Sometimes, those money is just for showing since it is too small to use because all of you tradings succeed in the first try.

There are no 100% in the game of probability

The probability for the head of the coin to appear in 10 times consecutively is not 0%, it just has not appeared yet. And when it appear, you will lose all you gave. So, is it worth trading? Once you win, you win a little money. Once you lose, you lose all.

This kind of death is just like  “once and for all”. You may get excited once in a while to earn money but just one moment, you lose all.

Keeping money is more important than making money

Keeping money is more important than making money
Keeping money is more important than making money

This is the motto of all the successful. You have to know how to keep your money before making money. Use all your money in just one trade is not something a person who is good at making money teaches you. And if you use Martingale strategy,  it‘s more likely that you would use all of your money in one trade. That’s when you go against the motto, the discipline, maybe you think you create a new path yourself, but let me say, it is truly a wrong path.

Can we use Martingale strategy in Olymp Trade?

You can take a look at: A strategy with 3 -same color-candles in Olymp Trade. You can try this strategy with Martingale: If there are three red-colored candles, you choose UP (green), when the price decrease, you continue to choose UP. If the candles consecutively appear with red color, 1000$ in your account will be away.

Can we use Martingale strategy in Olymp Trade
Can we use Martingale strategy in Olymp Trade

It is not that the situation that the price continuously going down and leave the candles appearing with the same color 10 times never happens. The market easily get influenced by news. If there’s bad news, there’s high chance that price only goes in just one direction. Using Martingale in Olymp Trade may lead you to an empty account.

How to use Martingale in trading system

You need good skills and methods, as well as stable mental state to be able to use Martingale in Olymp Trade. You are absolutely able to use Martingale and here is some experience shared by our skillful traders:

Knowing when to stop placing orders

When using Martingale, normally people place orders until their account is empty. However, instead of doing that, you should create a budget or a limit to follow Martingale.

For example: 3 continuous order is one cycle, and all the money to invest in the cycle is 200$ for 3 orders.

How to use Martingale in Fixed Time Trade system
How to use Martingale in trading system

Trading Order 1: 20$. Price gets out of upper band – Open a DOWN order – lost

Trading Order 2: 50$. Price gets out of upper band – Open a DOWN order – lost

Trading Order 3: 130$. Price gets out of upper band – Open a DOWN order – win

You can trade by cycle with these methods: Bollinger Bands strategy in Olymp Trade

The common things of these methods are: when the price go into the zone, the probability that it reverses is high. The matter is that you do not know when it reverses, that’s why you need to follow tendency in short period before it reverses. For example, when price go into the support or resistant zone, it may yet to reverse. You should place continuous orders so that you will not miss the chance to earn profit

No need to trade in only one cycle

Even you love long-period trade in Olymp Trade or you like short period trade and never place continuous order but just once, you can place separate order with high investment.

No need to trade in only one cycle
No need to trade in only one cycle

For example you only trade three times a day: Once in the morning, once in the afternoon and once in the evening. You can trade the first order with 15$; if you lose, you can place another order with 10$, and if you continue to lose, you can trade with 20$ in the last order. This way help you avoid negative emotion when trading and you can carefully analyse the market before placing orders.

If you want to try this dangerous strategy, know it well, use it wisely and flexibly or you will become its victim. Wish you success.

Join the Olymp Trade Club Signal Group: https://t.me/olymptradeclub19

Martingale Strategy, the most idiotic strategy when it comes to capital management in trading?
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