Binary options trading as the main source of income is becoming more and more popular. Choosing trading, market participants, first of all, understand that this activity is certified and reliable, that by working for a broker, you can earn real money in 30 seconds, in the case of turbo trading. Still, it is important for any trader to find a profitable strategy that would bring a stable income
We present to you such a profitable and one of the most discussed strategies in options – the Martingale strategy.
Martingale Strategy
The Martingale strategy
is one of the most effective approaches to compensating for possible trading losses, which is based on a mathematical pattern that will sooner or later lead you to win.
The principle of the strategy is simple: you need to open a deal. If it turns out to be unprofitable, you need to double it. So, the subsequent victory can not only cover your losses, but also bring significant profits. The goal of the strategy, therefore, is to ensure that the next probably profitable bet can cover the failed investment and also generate income. The author of the strategy is the French mathematician Paul Pierre Levy.
Having appeared, this system initially worked successfully in casinos, because the principle of roulette has two outcomes: black and red. Casino players, using the Martingale method, received huge cash rewards. As an example of the system’s performance, cite a coin: if you bet a dollar on an eagle and start tossing it, the bet will fall out sooner or later. In options, the same thing, in the difference that you constantly increase the rate, automatically increasing the amount of possible profit.
This idea of working with bets on doubling to win works in casinos, in Forex, and it is also popular in options trading. If you start trading stocks with $10, you increase the next trade to $20 and beyond. Your chances in such a trade are 50 to 50. In the event that the $20 trade is profitable, you will make a profit of $36 – this will cover the losses from the first failed investment of $10, the next one at $20, and also make a profit.
Martingale trading, due to its simplicity and effectiveness, has become one of the most popular among traders. By working with this system, you can get a stable income. In options, according to the terms of the trade, you have two outcomes of the transaction: down or up. It is easier to use the Martingale strategy in this case. The task of a trader working on a strategy is to wait for the final profitable trade, not paying attention to losses. By applying additional methods of market analysis: technical and functional types of analysis, indicators, you minimize risks and increase the success of trading.
Advantages of the strategy:
- Easy to use and affordable,
- A minimum investment is required for the first bet,
- In the case of a positive mathematical expectation, the rate covers all losses,
- In addition to the ability to compensate for losses, the strategy will also bring income,
- Proper deposit management,
- In many ways, the strategy justifies its existence, because the chance of winning is great. The more you lose, the higher the chance of winning.
Disadvantages of the strategy:
- To work, you need a lot of capital in the account, which you are willing to spend in anticipation of a positive transaction.
- The number of failed trades can be endless, so there is a high probability that there will not be enough money for the next bet.
How to apply the Martingale method in trading
The methodology for working on the strategy is simple, even a beginner of options will master it. Let’s say you buy a call option, according to mathematical probability, you have two outcomes with a 50% probability of the outcome: up or down. Remember that it is necessary to strictly follow the trading algorithm of the strategy, adding + 10% to the transaction again:
- Identify the direction of the trend,
- Determine the entry point,
- Wait for the result and act on it. In case of loss, add 10% to the total equivalent.
Rules of the Martingale strategy for binary options:
- The market is always dynamic,
- the market always expresses a trend,
- do not trade against the trend,
- test the strategy on a demo account,
- it is worth trading with a minimum amount,
- in the event of a losing trade, you need to double the next bet and work this way before you win,
- In case of winning, the amount of the next bet is reduced to a minimum.
- do not trade during the release of important news,
- When trading, do not give in to emotions.
Is it possible to work on Martingale on small deposits?
Here it is rather strict and categorical: no. The presence of a deposit acts as a guarantee of the efficiency of the principle. You should take into account that at least you should double the bet to 7 times.
The Psychology of Martingale
Despite the fact that the strategy is quite contradictory, it works, proving its effectiveness.
The state of loss is unloved for many, it is especially difficult to cope with losing your money. But following the Martingale strategy will allow you to solve all problems with one winning trade. In order for trading to be successful for you, prepare for the strategy, play it on a demo account. Then, when trading with real money, foresee and calculate the possible amount of costs and act. Remember that a keen desire to win money can prevent you, tune in to a state of luck and make successful investments.
Is the Martingale strategy worth applying?
It is difficult to answer this question and much will depend on the personality of the trader.
Due to the high efficiency and effectiveness, many market players risk capital by entering a positive transaction. So, the strategy is considered one of the most popular, although it has its opponents. In many ways, traders are helped to achieve the desired result by knowledge of the market, the rules of money management. With the correct calculation of risks and competent money management, the system is guaranteed to bring results.
Martingale strategy at FiNMAX broker
We recommend working on the Martingale strategy with a reliable broker FiNMAX, which will make the trading process easy and comfortable. The functional terminal has advanced features (choice of expiration from 30 seconds to six months, a set of indicators and chart types, analytics) for trading. You can see what the terminal workspace looks like in the image below. Explore the broker’s capabilities by going to the finmaxbo.com website.
A detailed review of the FiNMAX broker is here.
Go to the official website of the FiNMAX broker here.
In order to buy a CALL option in the Finmax trading terminal, follow these steps by going to the finmaxbo.com website and preparing the option, indicating:
- Type of asset
- Expiration
- The size of the bet
- Forecast of quote movement: UP
- Click the “buy” button and follow the results.
In order to buy a PCI option in the Finmax trading terminal, follow these steps by going to the finmaxbo.com website and preparing the option, indicating:
- Type of asset
- Expiration
- The size of the bet
- Forecast of quote movement: DOWN
- Click the “buy” button and follow the results.
FiNMAX broker bonuses up to 100%
For its customers, the official FiNMAX website holds many promotions and special offers, which you can get acquainted with here. By offering traders good promotions and bonuses, the broker makes binary options trading much more productive.
Tournament on demo accounts from FiNMAX
Free tournaments of the official FiNMAX website are held for those traders who have a demo account on the broker’s platform. The tournament will allow you to get money for further trading without replenishing the deposit. This makes FiNMAX trading possible without personal capital investment. The main condition for participation in the tournament is the availability of a demo account. Both options beginners and professionals can participate in the event.
Take part in the FiNMAX tournament
Findings
The Martingale principle is already quite old, it has been used in many fields of activity, today it is more popular on financial exchanges and is often used as a win-win scheme. This is a gambling trade, almost break-even if there is a sufficient amount on the deposit. Using the Martingale strategy, you will theoretically always be in the black.
