Martingale Strategy Applied to Binary Options

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Martingale Strategy Applied to Binary Options

Hi! Today I have prepared a strategy that is very simple. It is not based on MT4 system and use of indicators, but it is based on something a little different, which makes it really easy.

I was thinking about this strategy for a long time, but only now it has occurred to me that I could write an article about it and try it out at the same time. I know a lot of people will condemn me for publicizing this strategy, but I do not care. I just share my ideas, i am not telling you how to use your money, so do not think I am forcing you into anything. �� It is contrary to a lot of things that I have written on this blog so far.

This strategy is not a true trading strategy, but rather a gambling one. I have personally tried it and it worked superb so far. For some it may work out and they can make a fortune and for others it may not. This time we will be trading profusely – no more waiting for signals.

It is a strategy based on the principle of Martingale, which may tell some of you already, what is it about.

When to choose CALL or PUT

  • Just look at the chart that you can find below and you can see different currency pairs at the bottom. To the right of currency pair we can see the current rate and right next to it is: Strong Sell, Sell, Neutral, Buy, Strong Buy
  • If we see Strong Buy or Buy – choose CALL
  • If we see Strong Sell or Sell – choose PUT
  • If we see Neutral – we do not trade.

How does the strategy work

The whole strategy works on the principle of Martingale. We trade 60 seconds options with the lowest possible trade size. If we win – great! We trade again. If we lose, we increase the amount of our bet in such a way that it covers (in case we win) the previous loss from our last losing trade. That is usually about “two-and-a-half-times” amount of the previous trade.

If we bet $10 and lost, we bet $25 and in case of a profit of 70% we win $42.5. Since the total amount wagered was $35, we are $7.5 in the black.

I hope you understand.

What to trade

  • I trade using this strategy only with currency pairs, which are in the chart.
  • Chart can be found here : https://www.investing.com/technical/technical-studies on the right side, it’s second chart from the top.
Broker Info Bonus Open Account
USA Allowed Yes
Assets:
Payout: *
Demo Account: No
Min Deposit: $ 100
$10 BONUS Trade Now! Read Review

Brokers for this strategy must offer option trading with expiration date of exactly 1 minute + adjustable amount of deposit.

Comment on trading

  • If we mix martingale with some other strategy (eg. Trend lines trading) – chances increase even more.
  • We recommend to trade only from 9:00 (9 am) to 16:00 (4 pm)
  • If you do not know what to do, contact us in the discussion down below!

I have spent few hours using this strategy. Here is a record of my trades. In less than an hour, I made about $150.

More info about martingale

More information can be foun here:

Author

More about the author Step

I’ve wanted to build a business of some kind and earn money since I was in middle school. I wasn’t very successful though until my senior year in highschool, when I finally started to think about doing online business. Nowadays I profitably trade binary options full-time and thus gladly share my experiences with you. More posts by this author

19 Responses to “Martingale Strategy Applied to Binary Options”

Currency pairs or forex is in the chart that we will use, how can we use it in coinbase that offers Cryptocurrency?

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Will there be no problem for the strategy if we increase the trading amount? Thanks

Hi Albert. It is risky, so be cautious.

i have been using this stratergy very effectively. I trade the 1 minute trades. I enter and exit exactly on the minute. I multiply my investment amount by 2.5 everytime i make a loss. My question is if i trade a call option and on the one minute chart it falls, i would usually multiple by 2.5 and.place a call trade again and so on till i win . how many times in your experience has a trade gone uni directionally on the one minute chart

Dear Varun, it’s very difficult. On the minute chart, trades can go one way for many many candles in a row. I’ve seen 10 and sometimes even more.

Is there a free robot used to trade that you can advice us pls? Thanks.

Can this be applied in IQ Options? Thanks

Yes Albert, it certainly can be. The right question here would be: should it be ever applied? This strategy is risky.

What standard time is 9am to 4pm? Thanks I’m from Philippines

Hi, this is the official GMT time.

Can your strategy be applied in IQ Options?

Martingale is good on ONE condition, that you enter at the right time.
I use martingale as follows,
Candles
30 seconds
RSI 80/20
My trades are 2 minutes NOT one min
When to enter, ONLY when RSI is above 80 or below 20
Start your martingale

Thank you for your comment Kevin. Makes sense.

very similar to mine only that i use 1 min time interval and i make good use of support and resistance levels

Interesting strategy. But, if we loose, do we trade in the opposite direction, or in the same direction ?
I mean, If we CALL and loose, do we CALL again or PUT?
And when do we stop ? Is it safe to continue after the first win ?

Hi Preda, with martingale, you continue in the same direction. And you choose what is safe to you, whether you want to continue or not. It’s up to you.

It is safer to go alternate call and put except in a trend when you go in the direction of the trend. Going only in one direction is suicidal

Hello, thank you so much for your opinion �� We hope that the strategy still works for you. Good luck!

Can anyone even profit doing this? I can’t imagine… It must not work

Martingale

Martingale is a popular form of betting strategy and often used in binary options; read on to find out why you should not be using it.

The Martingale Method

A martingale is one of many in a class of betting strategies that originated from, and were popular in, 18th century France. The simplest of these strategies, all intended for gambling and gaming, was designed for a zero-sum game, that is, a game in which each side bets the same amount and wins and losses are absolute. If I win, I win all, if you win you win all.

The basic strategy has the gambler double his bet after every loss so that the first win would recover all previous losses plus win a profit equal to the original stake. In today’s world the martingale strategy is most often applied to roulette as the probability of hitting either red or black is close to 50%.

The idea behind the martingale is a simple one: Double your previous loss until you eventually win, resulting in profit no matter what, as long as you are capable of going the distance. The only limiting factor is the size of your account, so long as you can make the next trade you have a 50/50 chance of making all your money back.

What Martingale really does is remove the need to understand the market, technical analysis and trading because the only thing that matters is the outcome of the next trade. All you have to do be able to make a trade, and then double it if you lose.

Martingale is nearly a sure thing as your chances of producing a win grow with each consecutive trade, assuming of course you have an unlimited amount of time and a bank roll big enough to make whatever the next trade needs to be without going bankrupt. The danger lies within those assumptions.

To some, the martingale system seems pretty fail-safe, especially for newbies, but that is a popular misconception. If used incorrectly it can quickly compound ones losses to the point of catastrophic failure. The best thing to do is to use a sound money management technique like the Percent Rule to ensure that no single trade is so big it wipes you out. Save Martingale for having fun at the casino.

Why Martingale is not a good idea for Binary Options

Now with digital options there are some things you have to take into consideration. Number 1, you must be aware of the payout percentages because binary trading is a minus-sum game. You never win as much as you bet. Because they are less than 100% you must increase your stake with that in mind so you cover your previous loss and gain a profit equal to the initial trade, otherwise you will end up losing no matter what happens.

  • If you place a trade for $100 and lose it, then make a trade for $200 and win 85% you only get back $370, covering your cost($100 +$200) but only winning 70% of your first trade.
  • If you went to a third trade, a $400 trade, you would return $740 but only profit $40 or 40% of the initial trade.
  • If you took it to a 4th trade, only doubling the trade size, the profit shrinks again and will turn into a net loss on the 5th trade.

The real risk here is that with each trade, to ensure that you do not end up losing, you have to increase you stake by more than 100%. This means that your potential losses grow exponentially with each trade. The first trade is 100%, then the second is 100% +115%, then the third is 215% + 250%, then the fourth is 465% + 500% so that your first trade is X amount of dollars, and your fourth is nearly 10X dollars and growing with each trade until your account cant handle it any more and you are wiped out of the market. In the end, Martingale is not trading to win, its trading not to lose.

Full Review of The Martingale Strategy in Binary Options

This legendary system has been around for a very long time and it’s one of the most talked about strategies of all time. To be honest though, it’s not really a strategy, it’s more of a risk management system but it’s not even really one of those either. Today we are going to explain it in detail and get to the bottom of the all hype to see if it sucks or not.

The Martingale strategy originates in France and was first used in the 18th century. The most basic form was applied in the game of coin toss – a gambler wins if the coin comes up heads and loses if the coin comes up tails. (To be honest, things are not looking good for the Martingale right now because any association between a coin toss and trading…sucks big time but let’s keep an open mind and continue) If the gambler wins, he plays again or leaves the gambling table to spend his easy money, but if he loses, he must double up on his bet in order for his potential win to cover for the previous loss and provide a win equal to the original bet at the same time. Basically, it helps you maintain momentum when having a great long winning streak by bridging the gap of a few losses.

How to Use the Martingale Strategy?

Here is an example: if the first flip of the coin is a loss of $1, on the second one he bets $2. If the gambler wins this toss he wins $4. This returns his $2 stake and he covered his loss of $1 on the first bet and on top of that he made an extra dollar. All good so far but if he loses the second toss as well, he must double up his previous bet so now he has $4 at stake. If he wins he profits $4 on the trade which will cover his previous losses and bring him an extra dollar (first loss – $1, second loss -$2, total – 3 dollars).

If he loses, he will again double up the previous loss, which means he will bet $8. Ok, I’m not going to bore you anymore and just tell you that this doubling up will go on indefinitely until a win comes along. It will look like this: -$8, -$16, -$32, -$64….hmm, pretty long way from $1, which was our initial bet, but the point is it will cover all your previous losses and provide a $1 profit once you hit a winner. Well, in our scenario the gambler keeps trading until eventually the coin feels bad for all the losses and comes up heads for the final win. Given that our current bet was $128 (double the previous loss) we gain that amount and cover all the losses, plus $1 (all or losses summed up were -$127, basically your profits will be the current return – (the cost of the current trade + cost of the previous trade) = amount of original bet). That’s about it with the explanation so let’s look at the pros and cons of the strategy:

Why does the Martingale Strategy Suck?

Think of it this way: what if the streak of losses extends to 10, which is very possible? Assuming you just started with a bet of $1, your current bet would have to be $512…and if you win that, you make a measly profit of one buck (all your previous losses are -$511). Our bets will grow exponentially with every loss and the numbers will quickly get out of control if you never win and eventually you will run out of money. This strategy has no “edge”, nothing to make it work other than pure LUCK! It is clearly and with no doubt a gambling strategy and does nothing for you except the illusory promise of capital preservation…but maybe there is still hope for it and we could make it work in trading. Of course, before we move one, there is a bit of a problem when using Martingale with binary options. For it to work as described your trades must pay 1 to 1 or 100%. If you trade $100 you have to get $200 back on a win otherwise its a losing game. If you only get back say 80% then you only return 60% of the original trade.

Why the Martingale Strategy Doesn’t Suck

It is mathematically proven that eventually the coin will come up heads and we will win , , , if we can keep betting. The fact that you will win without a doubt and make at least a little profit generated the huge hype of the Martingale. However, you need two things to win for sure: infinite money and infinite time…yes, both hard to find, but don’t forget we are traders, not gamblers. A trader tries to tilt the odds in his favor using technical and fundamental analysis. If we combine Martingale and good analysis of the market…we might have a winner. Now, I’m not talking about a complete novice that just uses Martingale and has no idea about market environment, but a trader that can get the direction right at least once in five trades, or depending on his account balance, even once every ten trades.

Playing To Win Or Playing Not To Lose

Money management and risk control are the bread and butter of all traders, or gamblers for that matter. If you lose your wad you just can’t make the next trade, it is that simple. The problem is that it is possible to over manage your risk, to keep to tight a control on your money and thereby keep your self from making profits. This is called playing not lose. You may not lose your wad but you don’t win much either, and that is what the Martingale Strategy is, a way to play not to lose. All it does is prolong your play time until all those previous losses add up to an amount that will wipe your account right out of the market. It is by far better to play to win. You want to manage your risk, but you also want to let your winners win and to do this you have to accept your losses (one of the virtues of trading), and move on from them. This is why true money management and the Percent Rule we here at ThatSucks.com (former BinaryOptionsThatSuck.com) love so much is so very important. It keeps losses small so that no one loss, or losing streak, will wipe you out and yet will also let each trade grow as your account grows, maximizing profits. So, are you playing not to lose or are you playing to win?

Conclusion – Use the Extreme Caution!

I am not really a follower of traditional trading and money management techniques but I kind of like the Martingale and I consider that if used wisely – and please note that the bold characters are not used by mistake- it can turn out to be profitable. I mean, it’s fun to use when you’re playing roulette and can be used to have fun with binary options but not as a strategy by itself, because that is just gambling and hoping. If you are confident that your thoroughly tested system has an average losing streak that won’t blow your account or you just want to make a few trades to see if you like it, then you might consider a Martingale system to help cut your losses, knowing that eventually a winning trade will come. If all you do is gamble wildly on the market and think of yourself to be a trader then the Martingale will eventually blow in your face and you will be left with no money in your pocket.

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