Martingale on binary options

Martingale on binary options
These trades with Martingale would kill your account.

Even if they don’t say it, a lot of people are promoting trading systems that are based on the Martingale money management strategy. Martingale has a lot of forms, but in its basic one it is very dangerous on binary options.

Martingale is basically about multiplying positions when you have losing trades so that you cover all your previous losses and make some profit. The problem is that it means very big trades very soon if you get a series of losses.

Let’s see an example of 6 losing Martingale binary options trades, where you normally get an 80 % return.

Trade Investment Potential payout Real payout Total loss

1

25

20

-25

-25

2

40

32

-40

-65

3

90

72

-90

-155

4

200

160

-160

-315

5

400

320

-320

-635

6

800

640

-640

-1275

 

As you can see, if you start with an investment of $25 and get 6 losses in a row, you are forced to dramatically increase your positions. Only 6 losing trades in a row mean a total loss of $1275.

So don’t believe anyone who is trying to make you trade any system that is multiplying investments to cover previous losses. Losing trades are normal a sometimes they come in series, which is why Martingale is very dangerous in trading binary options.

There is no guarantee that you won’t get more than 4 or 5 losing trades in a row, in fact sooner or later you will get such a series. And if you are trading Martingale, it will mean the end of your binary option trading account.

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