What is a Martingale type betting?
A martingale is a betting method which is used as trading strategy in binary options which involves the increasing the amount of the initial investment amount at each loss we face at trading until a gain is achieved. This will give huge reward if we succeed at some point, what if we lose?? this method will lead us to BANKRUPT.!! Selling our beloved house, Car, doing dead end jobs.etc.
History behind Martingale Type Betting Strategy
The Martingale Concept in Probability theory was first introduced by PAUL LEVY in 1934, however the term MARTINGALE was not coined by PAUL LEVY, it was then coined by Ville in 1939. Usually, this type of strategies were most popular in the 18th century at France.
Why martingale betting doesn’t work
In my example, if you lose your transaction, this principle will invite you to repeat the same bet for an amount of €20. If your end up the trade at a loss, you should again bet the amount double than the previous one. In a few trades, the amounts to invest become astronomical and un-predictable. The results and consequences will be empty account or get lot of amount than we trade regularly.
Now see this Example in betting and find out why it does’t work?
If you look at the graph plot given above, you can find out your successive bet will be around 5Grands..$5,000. In order to win back all of your losses. If you win the bet, your total calculated prodit will $10, come on guys..it is not $10Grands..its just 10bucks….
The Modified Martingale Strategy
I just came across this Modified strategy on a forum. If you are really wealthy enough to bear the loss, go with this strategy.