What is the Martingale strategy?
This strategy is based mainly when the market generates a bad trade and you get a loss in the account where you are doing your daily trading, so you must make double the initial price in your next transaction. That is, if in your first transaction you bet $1 and got a loss, in your next transaction you must bet $3, since you will recover the money that you just lost in the first transaction, and you will be able to generate the profit that you will obtain in the new operation.
Who can use this strategy?
I recommend that if you are a trader who has just entered the world of trading, do not use this strategy yet because it can generate many losses in your real account. This is due to not knowing in depth the operation of the virtual market, you can incorrectly predict a direction consecutively, then the amount of loss will increase to the point that you lose all your money. But if you want to try this strategy, I recommend you use your demo account at all times while you learn how this strategy works.
If you are an expert trader, I recommend that you start trading with small amounts so that you do not suffer a big loss that ends up affecting your emotions at the end of your trade. I also recommend you see the news that the market has at the time you are trading to know the exact moment where you can use this strategy or at what time you should not use it to avoid losses in your real account.
Which broker should you use?
For this strategy to work effectively, you can use the broker that is available in your country. You do not need to get a specific broker, as the Martingale strategy is based solely on increasing the initial price if you make a loss on your first trade. The only thing you should check before trading is that the broker you are using is regulated to avoid any scam steal all your money earned with this strategy and accommodates your daily needs as a trader regardless of your level of knowledge about the online market.
How much to bet with this strategy?
So that you do not suffer a greater loss in your real account, Cristian Ap recommends that you use 1 or 2% of your capital. But if you find yourself using more than 5% on each trade there is a chance you will lose those trades, since this strategy can be very dangerous for any trader, regardless of your level of knowledge because if you bet a percentage on each transaction that you make, the more will be the loss that you will generate in your real account and these losses can affect your emotions during the day or while you are doing your trading.
When should you not use the Martingale?
Now, you will be able to visualize some of the things that you should not do when using the Martingale strategy so that you can avoid some losses.
- Accounts: If you are a trader who has more than 5 active accounts and you plan to use the Martingale strategy in each of them, remember that you will be using more than 5% and that can bring you many problems because you would be losing more money than normal. I recommend that if you have many active accounts, you only use it in a single account and with a low percentage so that you can avoid losing too much money.
- Increase your capital: If your only objective is to increase your capital quickly and without exerting too much effort, it is a serious mistake because it cannot turn out well, since if you have that mentality, you will be able to obtain many more losses than usual. Constantly remember that in the world of trading it is completely normal to generate losses and you should not focus on trying to reduce them quickly because it will not work.
My experience using the Martingale strategy can assure you that I was able to grow my real account, but slowly, as I had to learn how this strategy worked in more depth and try to avoid some of the most common pitfalls as a beginner trader. Despite being a dangerous strategy due to the risk involved in gradually increasing capital, it turns out to be effective if you know how to control your emotions when you are trading as well as knowing the exact moment where you should stop trading. Now, I will show you a video so that you can understand in more depth how Martingale works from the point of view of an expert trader: