Martingale strategy Part 2

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The second part of the Martingale Strategy, In this part you will learn why this trading method is so use within forex traders. Learn how to minimize your risk.

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Martingale strategy Part 2

  1. 1. Martingale Strategy Part 2 By: Fx-Megaforexwww.fx-megaforex.com
  2. 2. www.fx-megaforex.com Martingale Strategy Part 2 Continuing the example from part 1, lets now consider what happenswhen you hit a losing run.
  3. 3. www.fx-megaforex.com Martingale Strategy Part 2 Again, you hold $10and place an initial betof $1. You lose so your balance is now $9.
  4. 4. www.fx-megaforex.com Martingale Strategy Part 2 So, you bet $2 next time, lose again and end up with $7. Onthe third bet you gamble $4 but as your losing streak persists, you now only have $3.
  5. 5. www.fx-megaforex.com Martingale Strategy Part 2 You now do not haveenough money to “doubledown” so all you can do is gamble the reminder.
  6. 6. www.fx-megaforex.com Martingale Strategy Part 2Lose again and you are down to nil but even ifyou do win, you are nowsome way from the $10 you started with.
  7. 7. www.fx-megaforex.com Martingale Strategy Part 2You may believe that an extended sequence of losses would represent unusually bad fortune, but when dealing currencies, they are likely to trend and trends can last for a
  8. 8. www.fx-megaforex.com Martingale Strategy Part 2 The key element with Martingale, is that by doubling down you basically reduce youraverage entering price.
  9. 9. www.fx-megaforex.com Martingale Strategy Part 2In the following example, at 2 lots, you need the EURUSD to recover from 1.263 to 1.264 to break even.
  10. 10. www.fx-megaforex.com Martingale Strategy Part 2 The price lowers so nowyou add 4 lots, but now youonly need it to comeback to 1.2625 instead of 1.264 to break even.
  11. 11. www.fx-megaforex.com Martingale Strategy Part 2By adding more lots, you lower your average entry price. Even thoughyou may lose 100 pips on the initial lot of the EURUSD if the price hit1.255, you only need the currency to set to recover to 1.2569 to break even.
  12. 12. www.fx-megaforex.com Martingale Strategy Part 2 Sooner or later, things mayturn in your favor, but with the Martingale Strategy you may not have sufficient money to keep up in the game long enough for that to happen
  13. 13. www.fx-megaforex.com Martingale Strategy Part 2So this why you need deep pockets. If you could tradewith only $5000, you would bebankrupt before the EURUSDhad a chance to reach 1.255.
  14. 14. www.fx-megaforex.com Martingale Strategy Part 2A main reason why Martingale method is popular in thecurrency trade is because, asopposed to stocks, currencies reflect a country (notcompanies) so hardly ever go
  15. 15. www.fx-megaforex.com Martingale Strategy Part 2A currency can drop but even a sharp drop won´t result in a currency price of nil. Technically it is possible but alot would have to go wrong if it did.
  16. 16. www.fx-megaforex.com Martingale Strategy Part 2The Fx market also offers one unique benefit that makes itmore attractive for traders who can afford to use the Martingale Strategy…
  17. 17. www.fx-megaforex.com Martingale Strategy Part 2 INTERESTTraders can offset a portion of their short fall with interest earnings.
  18. 18. www.fx-megaforex.com Martingale Strategy Part 2 Because of this, an astuteMartingale trader would buy a currency with a high interestrate (and so earn that interest) whilst concurrently selling a currency with a low interest
  19. 19. www.fx-megaforex.com Martingale Strategy Part 2 In large amounts, the income from interestbecomes so substantialthat it can decrease the average entry price.
  20. 20. www.fx-megaforex.com Martingale Strategy Part 2 In conclusion, enticing though the MartingaleSystem may see, to sometraders, severe caution isneeded if attempting this
  21. 21. www.fx-megaforex.com Martingale Strategy Part 2 Mainly because even anapparently guaranteed trade may destroy your balance, just when you thought you were about to
  22. 22. www.fx-megaforex.com Martingale Strategy Part 2In the long run, traders must question whether they are prepared to lose themajority of their money on a single trade.
  23. 23. www.fx-megaforex.com Martingale Strategy Part 2As they need to do this just toaverage substantially smaller profits, several fell that theMartingale trading strategy issimply too hazardous for their liking.
  24. 24. www.fx-megaforex.com Martingale Strategy Part 2 So if you are going to attempt trading using thisapproach you should have a Forex Trading Strategy.
  25. 25. www.fx-megaforex.com Martingale Strategy Part 2 To determine when to enter and exit a position, and mainly to determine the currency trend. So, youtrade within the actual trade.
  26. 26. www.fx-megaforex.com Martingale Strategy Part 2 So when you enter the market you are minimizingyour risk and is less likely to enter a losing streak.
  27. 27. www.fx-megaforex.com Martingale Strategy Part 2If you need to find a good Forex Strategy, visit us at www.fx-megaforex.com

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