Forex glossary
Anti-Martingale System
Anti-martingale is a rule that increases the amount risked after gains and reduces it after losses. Fixed-fractional sizing is one variant; the rule does not create a trading edge or guarantee a future winning streak.
Illustrative example
How does it work in practice?
In a hypothetical variant, risk is 1% of current equity. At 10,000 USD that is 100 USD; after equity rises to 10,500 USD, the budget becomes 105 USD, before costs and volume constraints.
A case to work through
A smaller stake after a loss
Model: equity is 8,000 USD and risk is 1%; a closed loss is 80 USD, with no other changes.
- New equity is 7,920 USD.
- One percent of new equity gives a 79.20 USD budget.
What follows? Recalculate risk before the next independent position.
Example boundary: Fixed percentage is one variant; execution can change the actual loss.
A useful distinction
Anti-Martingale System / Compound Position Sizing
Compound sizing ties size to current equity; anti-martingale also includes other outcome-based rules.
Change an assumption, see the result
What changes if…?
Vary consecutive losses; the model reduces the budget at a fixed percentage of equity.
Model: capital × (1 − percentage/100)^loss count. Each closed loss exactly equals the specified share of current capital; no deposits, costs or gaps. A stop does not guarantee this outcome. The percentage is not a recommendation.
Check your understanding
Calculate the next risk amount after an equity decline.
Show the answer and explanation
59.40 USD
5,940 × 0.01 = 59.40.
From position budgets to portfolios
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Related terms
Sources and documentation
- CME Group: Proper Position Size
The lesson links planned position size to the risk budget, stop distance and the contract's monetary value per price increment.
Document read: - Paper on Kelly models and volatility
Mathematical capital-fraction assumptions rather than a risk recommendation or growth guarantee.
The example illustrates the mechanism. Check current account conditions and instrument specifications with the provider.