There are many ways of trading on the Olymp Trade platform. There are also many strategies to choose from. And to help you earn consistent profit you should develop a good strategy. My proposition for today is the anti-martingale trading method.
You might have heard about the Martingale money management strategy. As the name suggests, the anti-martingale method is something opposite. Let’s see how it works.
Key Takeaways🔑
| →The Anti-Martingale trading method is the opposite of the Martingale system, focusing on reducing risk and protecting capital. |
| →This strategy works by reducing the investment amount after a loss and increasing it after a win, hence it can potentially lower profits but also mitigate losses. |
| →Applying this method with care and strategic consideration is crucial to preserve and grow your account balance. |
Contents
Introduction to the anti-martingale money management
The Martingale strategy requires that you increase the invested amount every time you experience a loss. On the other hand, when you win, you decrease the amount of money invested in the next trade.
Now, I have already said that today’s strategy is quite opposite to the Martingale system. Here, in the case of lost trade, you reduce the invested amount by half and you double it when the previous transaction was a winning one.
The anti-martingale strategy is considered to be less risky in comparison to the Martingale system. However, it will probably bring you slightly lower profits than Martingale.
How to use the anti-martingale strategy at Olymp Trade
You can successfully trade fixed time trades on the Olymp Trade platform with the anti-martingale system. Simply follow a few rules.
Decide what will be the initial investment amount. For example, let’s start at $10.
Analyze the market and predict the future movement of the price. Enter the position in the forecasted direction.
What happens if you lose? You just have to prepare yourself for the next transaction with the investment amount in the size of $5.
Again, observe the market and open a transaction in the direction based on your analysis.
At the expiration time, you see your transaction has won. Next time, you should double the amount you put on the trade. In our case, you should invest $10.
Your third trade lost, so you decrease the investment amount again to $5.
After conducting the analysis, you open a position in the desired direction, and at expiration, you find out it was a good decision. So now, you have to double the amount.
You invest $10 in the fifth trade. You win. You double the capital again.
This time you lost $20. You half the size of the trade with every loss so you should put $10 in the next transaction.
When you win, you double the investment amount. So invest $20 in the eighth transaction.
You succeed yet again. Double the trade size to $40.
Another success. This time you can invest as much as $80.
Now, look at the table underneath. You can see your total profit there. It is $96.
The anti-martingale strategy will bring you quite a big profit when most of the trades win. But nobody can guarantee it will happen every time. The situation in the markets is not stable so the results can differ at each session. However, the anti-martingale system allows you to preserve your capital.
This is often considered as a golden rule of trading that the ability to be able to keep your balance in the account is more important than making profits. You cannot gain profit when you lose your capital after all.
Pros and Cons of the Anti-Martingale Method🎭
- Pros✅:
- Lower risk: By reducing the amount invested after a loss, it helps in minimizing potential losses.
- Capital preservation: It allows traders to protect their capital, which is crucial for long-term trading.
- Cons❌:
- Potentially lower profits: As the investment size is decreased after losses, profits might be lower compared to other strategies if wins and losses are equally frequent.
- Requires winning streak: The strategy is more profitable with a winning streak which cannot be guaranteed due to market volatility.
| Concept | Explanation |
|---|---|
| Anti-Martingale | A strategy that involves reducing the amount invested after a loss and increasing it after a win. |
| Martingale | A strategy that involves increasing the amount invested after a loss and decreasing it after a win. |
Summary
Money in your account is very precious. You should take care of them to be able to increase the capital in the future. And here you have a strategy that can serve this purpose very well.
It is also very likely that you will earn profits with the anti-martingale system. It proved its profitability when most of the trades in the session win.
No matter what strategy you apply you should use it with care. Be considerate and remember that Olymp Trade offers its clients a free demo account. This is an excellent place to practice a new approach. Try the anti-martingale strategy there.
I would be glad to hear from you. Use the comments section which you will find further down the site to share your thoughts on the anti-Martingale money management system.
Wish you good luck!
Questions & Answers🎤
- Q1: How does the Anti-Martingale system differ from the Martingale strategy?
- A1: The Anti-Martingale method decreases the investment after a loss and increases it after a win, whereas the Martingale strategy does the opposite.
- Q2: What are the main advantages of the Anti-Martingale system?
- A2: The Anti-Martingale system mitigates risk, helps preserve capital, and can yield significant profits if most trades win.
- Q3: What are the potential downsides of the Anti-Martingale system?
- A3: It might yield lower profits compared to other strategies if wins and losses are equally frequent and requires a winning streak for high profitability.
- Q4: Can the Anti-Martingale system be applied on any trading platform?
- A4: Yes, it’s a strategy that can be applied on any platform including Olymp Trade, but the outcomes depend on individual understanding and market conditions.
- Q5: Should I only use the Anti-Martingale system for trading?
- A5: It’s crucial to diversify strategies and not rely on a single method. The Anti-Martingale system can be a part of your trading strategies, but it should not be the only one.