There are a lot of strategies of money management on the Forex market, the Martingale method is one of these strategies.
It would be the most convenient to study the Forex Martingale on the example of the game the roulette; actually this method has come to the Forex market from the world of the gambling business. So, what is the essence of the Martingale method on the Forex market?
As you know there are two ways of play the roulette: a stake on fall number and a stake on a variant of a fall, when you choose one variant from an offered pair (even number/ odd number, red/black). A chance choice of one variant from two offered people name as 50/50. The Martingale method on the Forex market works by the principle 50/50 too.
But if a trader uses only the Martingale method, the trader can be brought to the full crash. So, what is the principle of the work of this contradictory method?
The essence of the play the roulette.
You take a minimally acceptable stake and stake on one of the variants, on a ‘black” for example. If you lose, you stake on a “black” again but you double your stake. You do that till your color wins. The price of the loss” the minimal stake multiplied on the number of launches of the roulette ball. The longer the process of guessing is, the larger sum of money you spend, and the win is always the same -/+ the minimal stake. As soon as you have “bought back” your stake on a “black”, you start again with the minimal stake.
The Martingale method on the Forex market.
The “scheme” of the game is the same, but you try to “guess” a lot instead of a color. So, if you lose, you pledge a double price on the lot. The Forex Martingale is rather a comfortable strategy, when the thing is about micro accounts. But the constant work with this method can bring you to the full crash, if your assets are not enough for the payment a double “stake” on the lot. If your “games” take longer than planned, then ROI can be almost zero.
There is one more Martingale method on the Forex market, traders name it “soft Martingale”. What is its difference? The essence of the given strategy stays the same, but you change numerical values of the “stakes” on loss or win. You do not double the “stake” on the lost lot, you increase the “stake” in a certain number of percents. The given Martingale method is less unprofitable and it allows you to “win back” if you have less money on the account, i.e. there is a larger possibility to get profit from the transaction.
So, we can make a conclusion that using the Forex Martingale as a constant method of the work on the currency stock, can bring you to the full crash. But you can use this method in your trade strategy.
As in any other niche of our life foreign exchange market needs some knowledge.
Surely, one can start forex investment and get quite successful about it. However sooner or later the losses will come. It is precisely when you might think “Why didn’t I start with a good forex trading education?”
That does not mean that after reading even the top materials you will start closing trading positions with huge income, but this knowledge will save you from many dangers. And even if you decide to get the assistance of a managed forex account service, still you will be able to make a much wiser decision.
And a final piece of advice – today the Internet technologies give you a really unique chance to choose what you require at the best terms which are available on the market. Strange, but most of the people don’t use this chance. In real life it means that you should use all the tools of today to get the info that you need.
Search Google and other search engines. Visit social networks and have a look on the accounts that are relevant to your topic. Go to the niche forums and join the online discussion. All this will help you to build up a true vision of this market. Thus, giving you a real chance to make a wise and nicely balanced decision.
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