The strategy which is based on the Martingale principle used to be successfully applied in a casino. People who played roulette and used this method could win large amounts of money. But this happened only if the initial investment’s capitals were big. For this reason, minimum and maximum amounts in casinos, as well as the fields of the green color (00 and 0), are currently restricted. But this system has the substantial disadvantage, which is the necessity to have big amounts in order to work with it.
The Martingale strategy was discovered by Paul Pierre Levy, the mathematician from France. As mentioned above, this principle was initially applied for the casino game. It was called the Doubling Down. On the other hand, overseas mathematician Joseph Leo Doob was repeatedly trying to disprove the possibility that this system can be profitable.
The essence of this system involves the presence of the first bet. If this first bet brings loss, it has to be doubled. It is done in order to make the next profitable bet not only to cover the loss, but also to bring profit. And in order to prevent this system from winning, two green fields have appeared on roulette. Therefore, additional variants of numerical gap, apart from the odd-even and red-black, have appeared. It results in that the mathematical expectation of the bettor to win decreases substantially and tends towards zero. In other words, if you start playing roulette which has 0, you play under the casino’s rules, and you have low chances to win. And if you see the 00 field, the mathematical expectation is almost equals zero, and it means that there are no chances to win. However, in the binary options there are no such tools which reduce the possibility of success.
In order to fully master the Martingale strategy, the next example can be cited: we take a coin and start spinning it. At the same time, the initial bet, for example, $1 bet that head or tails will come out, has to be set. Before the beginning, the chances that one or another coin’s side will come out are 50/50. In the end, if you have the start-up capital that is large enough, sooner or later you will be able to take the big profit that will both cover all your previous losses and bring a good profit. For this reason, the general principle here is that in order to gain profit from this system, you need the only one profitable deal.
The Martingale strategy was applied by many traders in the financial markets for a fairly long time. It is especially popular among the speculators in the international exchange market Forex. It can be also applied in the binary options trading, for this reason, we will consider the Martingale binary options strategy further.
Binary options trading strategy Martingale
This strategy includes one very important point. When doubling a bet you have to take into account the sum of all the previous amounts on this bet and not only the last one amount of the bet. For example, if a trader buys binary options in the amount of $10 and loses it, the next bet has to be $20. If the second bet doesn’t bring profit too, a trader will have to buy an option in the amount of $60. And if even this bet turns out to be a loss, a trader will have to invest $180. Not every trader will have enough funds to trade according to this system. But, unlike as in the casino, the binary options traders have one sufficient advantage. They can use the certain methods of market analysis. Therefore, their chances to earn profit grow substantially.
What is anti-martingale?
It is necessary to note that some traders use the so-called Anti-Martingale strategy. Its essence is in a fact that the sum doubles only if the previous purchase was successful. But this method has its own disadvantages too. For example, if there were few losing deals in a row, and the deposit’s amount has shortened by 20%, you will have to increase a bet for 25% in order to make your profits higher than losses.
Conclusion on the Martingale and Anti-martingale strategies
- Trading strategy is pretty simple and can be easily understood
- Constant doubling of a bet in case of loss is needed
- Fairly big deposit or back up funds are needed
- Unlike as in a casino, you have the means of the market analysis to increase the chances for a winning
Pay attention to the last point. If you come to the binary options for gambling, neither Martingale binary options, nor any other strategy will be able to help you. You will likely lose your deposit quickly. But if you accept the fact that the binary options trading is not a casino, but the complex profession, study the analysis’s theory and use it practically, then the Martingale strategy can be an auxiliary tool, which will save your bet at a difficult time
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