bring your net profit and loss to zero. What is that, exactly? As long as you stick with the same directional view each time, you would eventually, given an infinite amount of money, see the coin land on heads and regain all of your losses, plus. The system's mechanics involve an initial bet; however, each time the bet becomes a loser, the wager is doubled such that, given enough time, one winning trade will make up all of the previous losses. However, let's consider what happens when you hit a losing streak: Your Bet Wager Flip Results Profit/Loss Account Equity Heads 1 Tails (1) 9 Heads 2 Tails (2) 7 Heads 4 Tails (4) 3 Heads 3 Tails (3) zero Once again, you have. But when you trade foreign exchange (currencies they tend to trend, and trends can last a long time. Unfortunately, it lands on tails again and you lose another 2, bringing your total equity down. Also, if you are going to add to a position, only do so when the market is moving in your favor.
Thankfully, you hit a winner and gain 4, bringing your total equity back up. The answer is a blown account. No one has infinite wealth, not even the government, but with a theory that heavily relies on mean reversion, one missed trade can completely bankrupt an account. The second rule when scaling in is to wait for a close above or below a key level.
It is the major reason why casinos now have minimum and maximum bets, and why the roulette wheel now has two green markers (0 and 00) in addition to the popular odd or even bets. It certainly isnt the same as flipping a coin. Heres how that would look: Stake, outcome, profit/Loss, running Balance. One of the reasons the martingale trading strategy is so popular in the forex market is because, unlike stocks, foreign exchange rarely drop to zero. Heads 4 12, assume that you have 10 to wager, starting with a first wager. If there were asked whether they would be interested in a trading strategy that is practically 100 percent profitable. . Heres what you can do to get involved and have your question answered in next weeks post: Ask questions. So instead of Martingale or something similar, my advice is to learn price action strategies and techniques. The martingale system was originally a type of betting style based mainly on the premise of doubling down.
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