Free online slots games and more powered by 3 5 Cents (35c.net)
  • Home
  • Contact

Why Martingale Betting System Never Works in Trading?

Posted on March 19 by 35 Cents in baccarat No Comments
Home» baccarat » Why Martingale Betting System Never Works in Trading?

I wrote some articles on martingale betting system and even provided an example of using martingale as money management system in trading from my experiences. Of course it made me lose. In this article, we will find the reason while it never works.

Firstly, let me explain what martingale is for those who have never heard about it.
The martingale system is a betting system that is well-known among gamblers. The idea of this system is, if you start betting with a reasonably small amount, and lose it, you can simply continue betting double the previously lost bet until you win.

For example, if you are betting on baccarat and you start with $1 and you lose it, you may lose 5 times in a row. Therefore you lost $1 + $2 + $4 + $8 + $16 = $31 since you doubled the money every time you. Then if you win in the 5th game, while you are betting $32, you will gain $1 profit. It seems like the martingale betting system may result in a steady profit increase over time.

So, what is the problem? Let us imagine if you have 12 consecutive losses you will need $1 + $2 + $4 + $8 + $16 + $32 + $64 +$128 + $256 + $512 + $1024 + $2048 = $4095. That is a large amount of money comparing to the started point as $1.

You may think that it is not possible to lose so many times in a row it is. The risk has always been there and I mentioned about this (risk of ruin) in one my articles. Moreover, as I told you in the beginning, I experienced this myself when I traded with this system as money management.

What about if you have enough money to compensate your losses many times? It seems like the system is flawless this time, right? But do you really think it is worth to bet your large amount of money (maybe thousands) for making $1?

If consider it in term of probability, if you are trading a futures contract, you have 50% that the price will go the same way as your position (long or short). Then if you are stopped from the first position and you find an entry point to open a position again with double lots.

This time, what do you think how many chances for you to win? Someone may think that you chance to win will greater because there is less chance that the price will go against your position 2 times in a row. Actually, the chance in this case is always 50% even you are entering the 10th trade after lost 9 times in a row.

You can fine many experiment of the martingale system, you do not have to lose your money to experiment this yourself. Clever guys learn from other guys’ mistakes.

By Taro
Taro is an experience trader who trades in stocks, futures, forex. He strongly focuses on technical analysis, trading systems and money management.

If you would like to find more articles on MetaStock Tutorials, MetaStock Formulas, Trading Systems and Money Management. Please go to MetaStock Trading System.

Report Problem

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Free Slot Games

Slot 2000 Cyber Slots True Love Slots Fruit Machine Birds Of a Feather Classic Slots Egyptian Slots
Fruite Slots Halloween Japanese Slots magic.bobby Mini Penny Slots Pariboro Pharoahs Treasure
Pirates Revenge Poker Machine Prehistoric Slots Royal Sevens Slots Safe Cracker salata! Sexy Slots
Sign of Zodiac Spicy Fries! Spin to Win Spongebob Slots Top Fruits Slots TriviaCasino TROPICAL FRUIT

Popular Video

1,000 dollars winning on Triple Diamond 25 cent slots in Las Vegas

Latest Entries

  • How to find the very best of UK online bingo websites
  • Effective Roulette Betting Systems – Paroli
  • Slot Machine Practice
  • Knowing the Fundamentals of a Slot Machine
  • Slot clubs

Hot Topics

  • Casino
  • Online Casino Wagering
  • Online Casino SportsBooks
  • Online Casino
  • Hotel Casino
  • Offshore Casino
  • US Online Casinos
  • Free Casino
  • Las Vegas Casino
  • Casino Games
  • Casino Bonus
  • No Deposit Casino
  • Free Casino Games
  • Gambling

Did you know that …

... the first mechanical slot machine was the Liberty Bell, invented in 1895 by car mechanic, Charles Fey (1862-1944) of San Francisco?

The Liberty Bell slot machine had three spinning reels. Diamond, spade, and heart symbols were painted around each reel, plus the image of a cracked Liberty Bell. A spin resulting in three Liberty Bells in a row gave the biggest payoff, a grand total of fifty cents or ten nickels.

The original Liberty Bell slot machine can still be seen at the Liberty Belle Saloon & Restaurant in Reno, Nevada.

(c) 35c.net

7ads6x98y