What is Martingale Strategy?
Martingale is a position sizing strategy where the trader doubles the lot size after each losing trade. The theory is that a single win will recover all previous losses plus a profit equal to the original stake. While mathematically sound in theory, it is extremely risky in practice.
Why Martingale is Dangerous
A sequence of just 7-8 consecutive losses can increase position size by 128-256x the original, requiring enormous account balance. In forex, losing streaks of 10+