Forex glossary
Martingale System
Martingale increases the stake after a loss, classically by doubling. Recovering all earlier losses with one win assumes suitable payoff odds and the ability to place the next stake. With finite capital, exposure can exceed available funds; recovery is not guaranteed, and costs worsen the arithmetic.
Illustrative example
How does it work in practice?
Assume initial capital of 100 USD and successive losing stakes of 10, 20 and 40 USD, with no fees. Only 30 USD remains, insufficient for the next doubled stake of 80 USD.
A case to work through
Doubling with a smaller payout
Hypothetically, the previous loss is 40; the doubled exposure risks 80 but targets only 40.
- Even reaching the target recovers exactly the earlier 40 before costs.
- Additional costs leave a net loss, while another losing attempt increases it.
What follows? Calculate net payout and capital limits before assessing the scheme.
Example boundary: Neither the next win nor continued increases in exposure are guaranteed.
A useful distinction
Martingale System / Anti-Martingale System
Martingale increases stakes after losses; anti-martingale increases them after wins. Neither scheme guarantees loss recovery or profit.
Check your understanding
Compare the next attempt's profit with accumulated losses.
Show the answer and explanation
No; a loss of 5 remains
15+30=45, which exceeds the win by 5.
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Related terms
Sources and documentation
- MIT – doubling strategy
Mathematical doubling assumptions and finite-capital limits; recovery is not guaranteed.
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The example illustrates the mechanism. Check current account conditions and instrument specifications with the provider.