1. What is martingale.
Traders know the martingale system used in casino games. It consists in doubling the stake in case of loss. The history of this term leads to far XVIII century when it meant a game in an absurd manner (la martengalo). And the word signified the inhabitants of Martigues town in France who had the reputation of silly simpletons.
2. Playing casino with martingale.
There is mainly a lot of negative information on the Internet about the martingale system. If one calculates probability of gain when applying it in the casino, it turns out that in most of cases depending on the initial capital, he wins. For example, if funds allow to suffer losses 10 times in a row, the average probability of loss is 1/1024. See the calculation in the table.
But this result is average, the combination of 10 losing stakes appeared more often in reality, than it could be imagined. Based on my own experience in trading, I can say that combinations of 10, 15 or even 20 losing deals can be met from time to time.
3. Martingale in Forex trading.
Although, the martingale system is widely used in Forex trading no matter how many negative references it gets. What is th…