Trezor Bot Martingale
WHAT IS A FOREX MARTINGALE TRADING STRATEGY?
Would you be interested in a trading strategy that is virtually 100% profitable?
Amazingly, such a strategy exists and dates all the way back to the 18th century.
The Martingale strategy is based on probability theory, and if your pockets are deep enough, it has a near-100% success rate.
The Martingale strategy was most commonly practiced in the gambling halls of Las Vegas casinos. It is the main reason why casinos now have betting minimums and maximums, and why the roulette wheel has two green markers (0 and 00) in addition to the odd or even bets. The problem with this strategy is that to achieve 100% profitability, you need a significant money supply and in some cases, your pockets must be infinitely deep.
A martingale strategy relies on the theory of mean reversion, so without a large supply of money to bore positive results, you need to endure missed trades that can bankrupt an entire account. It's also important to note that the amount risked on the trade is far greater than the potential gain. Despite these drawbacks, there are ways to improve the martingale strategy so you can improve your chances of succeeding at this very high-risk and difficult strategy.
WHAT IS THE MARTINGALE STRATEGY?
Popularized in the 18th century, the martingale was introduced by the French mathematician Paul Pierre Levy. The martingale was originally a type of betting style based on the premise of "doubling down." American mathematician named Joseph Leo Doob continued the work of Levy in working on the martingale strategy, as he sought to disprove the possibility of a 100% profitable betting strategy.
The system's mechanics involve an initial bet; however, each time the bet becomes a loser, the wager is doubled such that, given enough time, one winning trade will make up all of the previous losses. For instance, the 0 and 00 on the roulette wheel were introduced to break the martingale's mechanics by giving the game more than two possible outcomes other than the odd versus even, or red versus black. This made the long-run profit expectancy of using the martingale in roulette negative, and thus destroyed any incentive for using the strategy.
To understand the basics behind the martingale strategy, let's look at an example.
Suppose we had a coin and engaged in a betting game of either heads or tails with a starting wager of $1. There is an equal probability that the coin will land on heads or tails, and each flip is independent, meaning that the previous flip does not impact the outcome of the next flip. As long as you stick with the same directional view each time, you would eventually, given an infinite amount of money, see the coin land on heads and regain all of your losses, plus $1. The strategy is based on the premise that only one trade is needed to turn your account around.
Examples of Martingale Strategy in Action
Your Bet Wager Flip Results Profit/Loss Account Equity
Heads $ 1 Heads $ 1 $11
Heads $ 1 Tails $ (1) $10
Heads $ 2 Tails $ (2) $8
Heads $ 4 Heads $ 4 $12
Assume that you have $10 to wager, starting with a first wager of $1. You bet on heads, the coin flips that way and you win $1, bringing your equity up to $11. Each time you are successful, you continue to bet the same $1 until you lose. The next flip is a loser, and you bring your account equity back to $10. On the next bet, you wager $2 hoping that if the coin lands on heads, you will recoup your previous losses and bring your net profit and loss to zero. Unfortunately, it lands on tails again and you lose another $2, bringing your total equity down to $8. So, according to martingale strategy, on the next bet you wager double the prior amount to $4. Thankfully, you hit a winner and gain $4, bringing your total equity back up to $12. As you can see, all you needed was one winner to get back all of your previous losses.
Why Martingale Works Better with FX
One of the reasons the martingale strategy is so popular in the currency market is because, unlike stocks, currencies rarely drop to zero. Although companies easily can go bankrupt, countries cannot. There will be times when a currency is devalued, but even in cases of a sharp decline, the currency's value never reaches zero. It's not impossible that a currency could reach zero, but what it would take for this to happen would be a global economic nightmare.
The FX market also offers one unique advantage that makes it more attractive for traders who have the capital to follow the martingale strategy: the ability to earn interest allows traders to offset a portion of their losses with interest income. This means that an astute martingale trader may want to only trade the strategy on currency pairs in the direction of positive carry. In other words, they would buy a currency with a high interest rate and earn that interest while, at the same time, selling a currency with a low interest rate. With a large number of lots, interest income can be very substantial and could work to reduce your average entry price.
Trezor Bot Parameters
- - - - - - - - - Indicator Mode - - - - - - - - -
Indicator_Signal: The bot contains 3 different indicators. Select the indicator that will send the signal to the bot to execute an order in Buy or Sell.
- - - - - - - - - Profit Setting - - - - - - - - -
Lots: Select the initial lot.
LotExponent: Define the multiplier that the Bot will apply to the initial Lot to perform the martingale.
PipStep: Number of pips for the bot to cover.
TakeProfit: Profit pips indicated to the bot that you must get in each order.
LotDecimal: Number of decimals used by the broker.
- - - - - - - - - Security Setting - - - - - - - - -
MaxLots: Maximum allowed lot value.
MaxTrades: Maximum number of open operations.
UseEquityStop: Enable (true) or disable (false).
TotalEquityRisk: Maximum assumed risk.
UseTrailingStop: Enable (true) or disable (false).
TrailStart: Start Parameter.
TrailStop: Stop Parameter.
- - - - - - - - - Magic Number - - - - - - - - -
MagicNumber: Magic Number