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[Oluti]

What is Martingale method ?

A martingale is any of a class of betting strategies that originated from and were popular in 18th century France. The simplest of these strategies was designed for a game in which the gambler wins his stake if a coin comes up heads and loses it if the coin comes up tails. The strategy had the gambler double his bet after every loss, so that the first win would recover all previous losses plus win a profit equal to the original stake. The martingale strategy has been applied to roulette as well, as the probability of hitting either red or black is close to 50%.

(source : Wikipedia)

How to use it in binary options ?

Binary options it's a pretty good approch for Martingale method, because there is only two possibles options (even if there are 3 possibility of result : The close value is up to the open value, the close value is down to the open value, the close value is on the spread value).

The principle is simple, for exemple :
You take a call order on binary option, if you win, you get 90% of your order amount.
But if you loose, you need too gamble more at the next order following this formula to compute the next order amount, if you want to get your loosed amount and 90% of the first order amount :
([Amount of the loosed orders] + [Amount of the first order] * 0.9) / 0.9

So you're insured to get back your loss and to get 90% of the first order amount.

Example :
I put an order of 100 USD, I loose it.
I need to put an order of 211 USD = (100 + 100 * 0.9) / 0.9, if I win, I get 400 USD, whether 400 USD - 100 of loss - 211 of gamble = 89 USD of winning.
If I loose, I need to put an order of 445 USD = (100 + 211 + 100 * 0.9) / 0.9, if I win, I get 846 USD, whether 846 - 100 of loss - 211 of loss - 445 of gamble = 90 USD of winning.
[...]

What's the limit, risk or profit ?

As you can see, the limit is the same that at the casino roulette, in binary options, you have a order amount limit (1000 USD on Dukascopy), so the risk is if you loose too much successive orders and you can't gamble more than 1000 USD and you loose everything.

The profit can be higher because you can get monney every time even if you loose more than 3 following times.

Conclusion

This method is very risked and limited, but more the first order amount is small, more you can loose at following times but less monney you can win at each order, and more the first order amount is big, less you can loose at following times but more monney you can win at each order.

 

[kerryjoy]

Although the Martingale method seems like a smart way to recover losses, it's a ticking time bomb. I've tried it with binary options. Although the adage "double up until you win" makes sense, losing streaks actually occur more frequently than we'd like to acknowledge. You risk draining your account or reaching platform limits after one bad run. It's more stress than it's worth, in my opinion. Although the appearance of assured profit is alluring, it's like dancing on a precipice—one mistake and your game is over. Would I make use of it once more? Perhaps not with actual stakes, but with play money. Do you believe that the risk is ever really justified?

 

[marsnow96]

I'll summarize it as best I can, if you have a lot of capital and you open small operations with a low percentage of capital, it's a good idea since statistically you will win, but you must have a limit of martin gala in a currency pair, if it doesn't work you must change to another, because you can burn your account by doing martin gala in the same pair constantly, you should always analyze, but if everything is like that it's a good idea, now if you have little capital and think about doing many martin galas it's a very bad idea, the possibilities of burning the account are very high, so you have to do it with a lot of discipline

 

[perlcode]

If you apply a martingale system long enough, you will ALWAYS end up with a profit, no matter what the risk/reward ratio is.

The only problem is that eventually you will reach a losing streak long enough to wipe out your account. It’s not a matter of IF it will happen, but a matter of WHEN.

And, trust me, it’s not going to take very long. You would be surprised to know how fast doubling your bet can lead you to ruin.

Just think about it: it only takes 6 consecutive losses for you to lose 63x your initial risk. And that only gets worse if you more than double you bet (like you are proposing).

No strategy is going to help you win at Binary Options.

The Martingale option, modified or not will only ensure you lose even more in the end.

Your payout is less than your wager and as you are gambling on a coin toss dressed up as ‘skilled investment strategy’ and the resulting outcome is at best 50:50 you are destined to lose over time.

If it were possible to win at Binary options gambling some very clever brains would have worked out how to do it, the brokers would have gone bust and we would be falling over millionaires on the streets.

 

[marsnow96]

If you apply a martingale system long enough, you will ALWAYS end up with a profit, no matter what the risk/reward ratio is.

The only problem is that eventually you will reach a losing streak long enough to wipe out your account. It’s not a matter of IF it will happen, but a matter of WHEN.

And, trust me, it’s not going to take very long. You would be surprised to know how fast doubling your bet can lead you to ruin.

Just think about it: it only takes 6 consecutive losses for you to lose 63x your initial risk. And that only gets worse if you more than double you bet (like you are proposing).

No strategy is going to help you win at Binary Options.

The Martingale option, modified or not will only ensure you lose even more in the end.

Your payout is less than your wager and as you are gambling on a coin toss dressed up as ‘skilled investment strategy’ and the resulting outcome is at best 50:50 you are destined to lose over time.

If it were possible to win at Binary options gambling some very clever brains would have worked out how to do it, the brokers would have gone bust and we would be falling over millionaires on the streets.

But if properly implemented, it is possible to use the Martin Gala in our favor and be profitable. You have to have a limit on the number of Martin Galas and losses. Since it is done without limits, it will obviously end up burning the account. I would say that you should not always do the Martin Gala, only sometimes. You have to evaluate statistically when you can, when you cannot, how many times, etc. It would be a matter of planning a long-term strategy. But doing the Martin Gala indefinitely without any strategy will obviously end up burning the account.

 

[Professional Writer]

I really hate martingale.