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Martingale strategy Part 2
- 1. Martingale Strategy Part 2 By: Fx-Megaforex www.fx-megaforex.com
- 2. www.fx-megaforex.com Martingale Strategy Part 2 Continuing the example from part 1, lets now consider what happens when you hit a losing run.
- 3. www.fx-megaforex.com Martingale Strategy Part 2 Again, you hold $10 and place an initial bet of $1. You lose so your balance is now $9.
- 4. www.fx-megaforex.com Martingale Strategy Part 2 So, you bet $2 next time, lose again and end up with $7. On the third bet you gamble $4 but as your losing streak persists, you now only have $3.
- 5. www.fx-megaforex.com Martingale Strategy Part 2 You now do not have enough money to “double down” so all you can do is gamble the reminder.
- 6. www.fx-megaforex.com Martingale Strategy Part 2 Lose again and you are down to nil but even if you do win, you are now some way from the $10 you started with.
- 7. www.fx-megaforex.com Martingale Strategy Part 2 You 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. www.fx-megaforex.com Martingale Strategy Part 2 The key element with Martingale, is that by doubling down you basically reduce your average entering price.
- 9. www.fx-megaforex.com Martingale Strategy Part 2 In the following example, at 2 lots, you need the EURUSD to recover from 1.263 to 1.264 to break even.
- 10. www.fx-megaforex.com Martingale Strategy Part 2 The price lowers so now you add 4 lots, but now you only need it to comeback to 1.2625 instead of 1.264 to break even.
- 11. www.fx-megaforex.com Martingale Strategy Part 2 By adding more lots, you lower your average entry price. Even though you may lose 100 pips on the initial lot of the EURUSD if the price hit 1.255, you only need the currency to set to recover to 1.2569 to break even.
- 12. www.fx-megaforex.com Martingale Strategy Part 2 Sooner or later, things may turn 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. www.fx-megaforex.com Martingale Strategy Part 2 So this why you need deep pockets. If you could trade with only $5000, you would be bankrupt before the EURUSD had a chance to reach 1.255.
- 14. www.fx-megaforex.com Martingale Strategy Part 2 A main reason why Martingale method is popular in the currency trade is because, as opposed to stocks, currencies reflect a country (not companies) so hardly ever go
- 15. www.fx-megaforex.com Martingale Strategy Part 2 A currency can drop but even a sharp drop won´t result in a currency price of nil. Technically it is possible but a lot would have to go wrong if it did.
- 16. www.fx-megaforex.com Martingale Strategy Part 2 The Fx market also offers one unique benefit that makes it more attractive for traders who can afford to use the Martingale Strategy…
- 17. www.fx-megaforex.com Martingale Strategy Part 2 INTEREST Traders can offset a portion of their short fall with interest earnings.
- 18. www.fx-megaforex.com Martingale Strategy Part 2 Because of this, an astute Martingale trader would buy a currency with a high interest rate (and so earn that interest) whilst concurrently selling a currency with a low interest
- 19. www.fx-megaforex.com Martingale Strategy Part 2 In large amounts, the income from interest becomes so substantial that it can decrease the average entry price.
- 20. www.fx-megaforex.com Martingale Strategy Part 2 In conclusion, enticing though the Martingale System may see, to some traders, severe caution is needed if attempting this
- 21. www.fx-megaforex.com Martingale Strategy Part 2 Mainly because even an apparently guaranteed trade may destroy your balance, just when you thought you were about to
- 22. www.fx-megaforex.com Martingale Strategy Part 2 In the long run, traders must question whether they are prepared to lose the majority of their money on a single trade.
- 23. www.fx-megaforex.com Martingale Strategy Part 2 As they need to do this just to average substantially smaller profits, several fell that the Martingale trading strategy is simply too hazardous for their liking.
- 24. www.fx-megaforex.com Martingale Strategy Part 2 So if you are going to attempt trading using this approach you should have a Forex Trading Strategy.
- 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, you trade within the actual trade.
- 26. www.fx-megaforex.com Martingale Strategy Part 2 So when you enter the market you are minimizing your risk and is less likely to enter a losing streak.
- 27. www.fx-megaforex.com Martingale Strategy Part 2 If you need to find a good Forex Strategy, visit us at www.fx-megaforex.com