Martingale Trading system – Trading strategies

The Martingale Trading system:

The basis of the Martingale Trading of commercial system forms a French quits system from the 18th century. Besides, the principle is relatively simple. If it comes to a loss the application is doubled with the next Trade. If it comes to a profit becomes the application as soon as the losses were made up again on the original level put back. Provided the trader disposes of sufficient resources this system is sure very much. Indeed, this is in practice only very seldom the case, which is why this strategy is not to be recommended rather. Though the system is recommended even by some experts, nevertheless, in the long term threatens the deletion of the account.

Advantages of the Martingale Trading system:

• theoretically very sure system

Disadvantages of the Martingale Trading system:

• in practice only seldom applicable
• mostly low profit / risk relation

Use of the Martingale Trading system

1. The Martingale Trading system is suited from the principle for all currency pairs and time windows.
2. First a normal position size is fixed
3. Any order with a firm Stop-Loss and the same take profit place.
4. Depending on on account of the Stop-Loss or the take profit is released, there is a profit or a loss.
5. If it comes to a profit the position size is put back again on the original value and the step 4 is repeated.
6. With a loss the step 4 is repeated with the double application.

Example of the effects of the Martingale Trading system

1. Accepted you trade the currency pair EUR/USD with a standard plumb line of 0.01 and begin with a credit of 10,000 euros.
2. They go for Long and put profit on 40 Pips to the Stop-Loss as well as the take.
3. The Stop-Loss is released and they suffer a loss of 40 Pips as 4 euros. Now their account balance amounts to 9.996 euros
4. Now the position size is doubled on 0.02 plumb lines and you go Short. Accepted now the take profit is released earn a profit of 8 euros and the account balance grows in 10.004 euros.
5. Now you put the position size again on the original value of 0.01 plumb lines and start once more.
6. With an original account balance of 10,000 euros you could lose with this system 11 Trades to the piece, until the account is extinguished. To double the account balance on 20,000 euros you would have to win 250 Trades.

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