In the beginning of autumn, in a blog, an article was published on how to apply the principle of martingale in trading . Did you know that this principle allowed us to develop a system of earnings on the stock exchange called “antimartingale” ? It is used by newcomers to Forex, often without knowing it, but intuitively guessing what needs to be done and why. Professionals have studied this principle in more detail, act thoughtfully and prudently, therefore they earn more serious income.
Anti-martingale strategy is the opposite of martingale. In this article we will look at its technology , advantages and disadvantages . In a classic martingale, a trader increases the volume of a position when receiving a series of losses, then one successful deal covers them all and goes into a plus.
Antimartingale is when you increase the size of the position only in proportion to the growth of the deposit and decrease in case of losses. This allows you to quickly increase the deposit without any special tricks.
Major mistake of newbies in antimartingale
Since the history of the martingale method was once related to casinos and roulette, many newbies think that everything is the same on the stock exchange. In reality, the stock exchange and casinos are completely opposite systems, if only because in a casino the consequences of your actions can be predetermined in advance — the system always wins there, and not the person.
On the exchange, in the presence of a high-quality trading system , a trader can earn in any perspective, be it a medium-term or long-term one .
Exchange and casino combines only one thing – the presence of participants with similar psychology who want to get rich and cover their losses in case of failure. If the results of your actions at a casino are deplorable results due to the rules established long ago and not by you, then the financial markets are good because each trader acts according to his own rules, which he sets himself. And while consistently making.
You can quite successfully combine both ways – martingale and antimartingale . To do this, you must clearly understand the sequence of transactions.
Remember that trading on the antimartingale system can significantly reduce the risks and increase the level of profitability. After all, it implies that the volume of a profitable position can double, and the number of such increases is unlimited.
How the principle of the anti-martingale system works in practice
- First, you correctly define the entry point.
- Gradually you close profitable positions, in the same direction you open new ones and increase the volume. Here you independently record levels of profit by position.
- The first time you increase the position volume after the second profitable transaction, but not the first! At the same time the volume doubles. Thus, as a result of a series of profitable transactions, your deposit increases significantly.
Using the method, be sure to consider the amount of the deposit , the credit arm , the levels of risk , spreads . Even with the correctly calculated volume of the first transaction, open at a time no more than 3 transactions.
If the transaction turned out to be unprofitable, then gradually reduce the volume to the original . Perhaps you made a mistake when you determined the movement of the trend or price reversal. Reducing the volume will help minimize the loss of funds. This tactic is justified, because the trend can not be eternal and at any time is able to behave unpredictably.
What is the advantage of the method?
The advantage of the anti-martingale system on Forex and other financial markets is the ability to significantly increase the deposit in a short time . This is due to a series of profitable transactions that increase your account size exponentially with minimal risk. As with a series of losses, the volume of positions not only does not increase, but, on the contrary, decreases.
What is the lack of antimartingale?
You can apply it only if there is a steady trend ! That is why antimartingale can not be applied in the flat , because there successful transactions alternate with unprofitable. To apply antimartingale on Forex, you must very accurately calculate the place of entry into the market, the volume of the first position and the next steps. Moreover, the increase factor is directly proportional to the size of the deposit .
If the Martingale because of insufficiently deep “pocket” and a long series of losing trades, you risk on a grand scale, and even if the income of a successful transaction may be minimal, the main danger whenantimartingeyle – you will be hard to close the losing trades when hit by a series of setbacks. If you want to learn how to correctly apply both strategies , then we recommend starting with 5 free lessons from Alexander Gerchik himself! And if you have questions on this topic, ask them in the comments.