Martingale strategy

There is a Forex strategy, or more precisely, a money management system that is almost 100% profitable. Almost, because there is one condition we cannot fulfill: this condition is the infinite margin.

But it works, even in this way, you just need to be careful. (You need to be careful as always when you trade Forex.)

It is called the Martingale system (Martingale strategy). The system works by recouping all losses through the increase of lots after successive losing trades. Originally, this strategy was practiced in casinos and is the main reason why casinos now have betting minimums and maximums and why the roulette wheel has two green markers (0 and 00) in addition to the odd or even bets. So, if such actions were taken by casinos to protect themselves, you can believe that it works.

Why use it in the Forex market instead of casinos?

  • While casinos are taking actions against you, the Forex market does not!
  • While in casinos you can easily lose all your money, in Forex you can limit your losses in a better way!
  • Because currency prices are much more predictable than luck.

Now let’s see how the Martingale strategy works! (Try in demo and practice before you start trading live.)

Open a position with the lowest position size allowed by your broker and set a 20 pip stop loss and take profit level (this is big enough to stay in market for a while, and small enough to be hit easily) and wait. If the position is closed with profit, do the same again, if it is closed with loss, double the lot size. If it closes with profit, start all over again from the beginning with the smallest lot size, if it is closed with loss, double the lot size, and so on. When you lose, double the lot size, when you take profit, start all over again from the beginning.

For example:

Position number Lot Margin needed on USD/JPY, 1:500 leverage If you lose 20 pips If you win 20 pips Profit after 1st profitable position 
1 0,01  $                      0,20  $       -0,22  $       0,22  $                     0,22
2 0,02  $                      0,40  $       -0,44  $       0,44  $                     0,22
3 0,04  $                      0,80  $       -0,88  $       0,88  $                     0,22
4 0,08  $                      1,60  $       -1,76  $       1,76  $                     0,22
5 0,16  $                      3,20  $       -3,52  $       3,52  $                     0,22
6 0,32  $                      6,40  $       -7,04  $       7,04  $                     0,22
7 0,64  $                    12,80  $    -14,08  $     14,08  $                     0,22
8 1,28  $                    25,60  $    -28,16  $     28,16  $                     0,22
9 2,56  $                    51,20  $    -56,32  $     56,32  $                     0,22
10 5,12  $                  102,40  $  -112,64  $   112,64  $                     0,22

From the table above you can see that after the losing period is over and your first profitable position is closed, you will recover all previous losses and you profit again. The more margin you have, the more possibility it gives you for doubling, but the average performance for a newbie is 1 wining trade form 6. Now you ask if it is possible to lose 10 times consecutively… Well, it is, but if you are careful and smart you can avoid it.

Very Important:

  • Do not overtrade!
  • Don’t be greedy!

We can recommend you 2 brokers where you can try this system (the Martingale strategy) with free demo and live!

1. Marketiva – Free Live and Demo account

  • 1:100 leverage,
  • $1 minimum deposit,
  • $0,01 minimum position
  • You receive $5 registration bonus without any deposit      

2. FX Open – Free Live and Demo account

  • 1:500 leverage;
  • Minimum deposit for micro accounts $1, ($0,20 position size on USD/JPY, 1:500 leverage)
  • Minimum deposit for standard accounts $25.
  • Minimum deposit for ECN/STP accounts $1000.

If you have any question regarding the Martingale strategy, do not hesitate to contact us.