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Martingale Strategy in Roulette
The Martingale strategy is one of the most famous, the simplest but also the trickiest betting strategies not only in Roulette.
History of the Martingale Strategy
The strategy was named after John Henry Martindale, whose name was later mutilated to Martingale. J. H. Martindale was a casino owner in London. He was so convinced that the casino would always have to win that he encouraged players to double their bets as long as his casino was in trouble.
A hundred years later in 1891 the Martingale strategy was successfully used in Roulette by legendary Charles Wells, who broke the bank 12times within 3 days in Monte Carlo! His success was an inspiration for a song “The man who broke the bank at Monte Carlo”.
He started the play with 4,000 francs, but he brought home 1,000,000 francs! He lived life in rich, but in the autumn of his life speculations on bursa become fatal to him and he lost his fortune.
The Principle of the Martingale Strategy
The principle of the Martingale system in Roulette consists in doubling the bets after each lost spin. The players usually make bets on red or black numbers, but you can well bet on any other evenmoney bets, i.e. on low (1–18) and high (19–36) numbers and on even and odd numbers.
Bet one unit (a dollar for example) on your even odd. If you lose, double your bet, that is 2 × 1 = 2 units. If you lose now, double your bet again, that is 2 × 2 = 4 units etc. If you keep losing, continue to double your bets until you win, i.e. 8, 16, 32, 64, 128. units in successive steps. Whenever you win, you always gain one unit (see the exhibit below).
Table – Martingale Strategy in UseSpin  Your Bet in Units  Loss  Profit  

The Next Bet  Loss in Units  Cumulated Loss in Units  
1.  1  ×2  1  1  2 × 1 – 1 = 1 
2.  2  ×2  2  3  2 × 2 – 3 = 1 
3.  4  ×2  4  7  2 × 4 – 7 = 1 
4.  8  ×2  8  15  2 × 8 – 15 = 1 
5.  16  ×2  16  31  2 × 16 – 31 = 1 
6.  32  ×2  32  63  2 × 32 – 63 = 1 
7.  64  ×2  64  127  2 × 64 – 127 = 1 
8.  128  ×2  128  255  2 × 128 – 255 = 1 
etc.  Whenever you win you always gain one unit, the sequel ends and you start over with one unit. 
The Drawbacks of the Martingale Strategy
There are several drawback of the Martingale system. Doubling the bets makes them grow in geometric progression. Therefore it is recommended to begin with a small initial bet. Even though the bets can grow rapidly when having a bad series. (→ Roulette Record Series)
Some players are convinced, when e.g. red color came 3times in a row, that it would be more probable for black color to come up. The answer is: No, not at all! A new spin represents a new event. That means you have got the same chance for black or red number to come up (18/37 in French Roulette, 18/38 in American Roulette). Roulette has no memory!
Moreover these days it would be hard to follow the success of Charles Wells. Simply for the reason that all casinos set limits for the maximum bet. For instance, if the minimum bet would be $100 and maximum $5,000, then you can double your bet only 5times: 200, 400, 800, 1600, 3200. And it is not unusual when the same color comes up 7 or 8times in a row!
If we abstracted from this and had unlimited capital and no limits for bets, then it would be really “probable” that you would finally win using the Martingale strategy.

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Low Risk Martingale.
To be Treated With Maximum Respect!
Understand and Respect the Martingale!
Binary options brokers make sure that they have a mathematical edge because that is their business, if you start to look at binary options trading as a business also then you will need to do the same. So the real question is; how can you get your own mathematical edge? Compounding is one way and what you are about to learn now is another, most people will tell you that any martingale approach is gambling. In fact, lets be realistic, for most people it is gambling and the next question is are you ‘most people’?
Due to the fact that most people won’t understand what is about to follow we are going to have to just call it gambling, many will and they are entitled to do so. The reality of life is that nothing is guaranteed and everything is gambling to some extent anyway. If for example you get a job and commit your life to company X, you are gambling on the fact that the company X will not shut down and leave you unemployed, or let you go because they are down sizing. That example is an extremely low risk form of gambling, but gambling nonetheless. Low risk = low rewards, high risk = high rewards!
Since there is no trading system on earth that will win 100% of the time, loss must be calculated in to any profitable trading plan. If you do not yet have a trading method with a high win rate and few consecutive losses then please visit the Forex Basics and Trading Strategies sections of this website. After that you can grab a Free Membership here so you can watch the free video course and expand your knowledge further. What is explained in detail throughout those sections and that video course will be taken to new speeds in the Binary Options Strategy lessons that follow.
The Low Risk Martingale in Action
A martingale approach has been around a very long time and you can use it intelligently, or you can use it to gamble. What we are going to do here is to use it intelligently and only to the extent of our means. One of the first things you need to figure out is how many trades you usually take per day on average. If you are able to sit down for a few hours per day for example, you will need to judge how many trades you are getting on average for those few hours. If you generally keep your eye on the charts all day then you need an average trades per day for that. Just like the previous lesson your best friend here is experience with your trading method and some trading history to review.
Now you need to think about how many winning trades it would take to erase a loss of your maximum martingale depth. A smart and not too deep place to start with this is a 2 level deep martingale, which means you would need to lose 3 trades in a row in order to consider the day a loss. The following table shows you the numbers based on an initial trade of some common sizes and we will use 70% payouts for these examples to keep it extreme.
70% Return  $10 Start  $25 Start  $50 Start 

Martingale 1  $25  $61  $122 
Martingale 2  $60  $148  $296 
Wins Needed  14  14  14 
Losses to Lose  3  3  3 
Session Profit/Loss  $95  $234  $468 
Before you proceed with a 2 level deep martingale strategy you will need to be sure that losing 3 trades in a row with your trading method is not very common. It doesn’t matter if it happens occasionally, it just matters that it doesn’t happen that often. As you can see in the above table it would require 14 wins to erase a 2 level martingale full loss, with an 80% payout the required wins drops to just 11, with an 85% payout it drops to 10. The higher percentage payouts you can find the less wins you will need and the easier your job will be. Visit our Regulated Binary Options Brokers page to discover up to 100% returns and make this even easier.
What you need to do now is consider the above information and create for yourself a session, or daily, goal. Every time you sit down you will either lose 3 in a row and then walk away, or you will win 14 trades (or 10 if you are getting 85% payouts, or just 7 on 100% payouts) and it doesn’t matter if they are in a row or not. Let’s say you are at 12 wins of 14 required and you just need 2 more, the following would get you there and complete your session: loss, loss, win, loss, win. This is the power of the martingale but it is very important that you have a solid proven trading plan to follow before you consider it.
It is always best to stay as realistic as you can and not assume that you will win every session. The following table helps you understand why you don’t have to win every session and what your requirements are to stay profitable.
5 Sessions  $95/Session  $234/Session  $468/Session 

0 Session Loss  $475  $1170  $2340 
1 Session Loss  $285  $702  $1404 
2 Session Loss  $95  $234  $468 
3 Session Loss  $95  $234  $468 
4 Session Loss  $285  $702  $1404 
5 Session Loss  $475  $1170  $2340 
The numbers are clear and obviously you will prefer not to lose any session but you could lose 1 of 5 and still be doing quite well. A worse case scenario for you should be the losing of 2 sessions per 5 which still leaves you with some profit. After that you start heading to negative territory which probably means your trading strategy, or your ability to execute it, is not yet up to speed and you need to get back to studying and practicing for a while longer.
Let’s quickly run some more numbers based on the same concept and using the worst case scenario 70% payouts again.
70% Return  $20 Start  $30 Start  $40 Start 

Martingale 1  $49  $73  $97 
Martingale 2  $119  $178  $236 
Wins Needed  14  14  14 
Losses to Lose  3  3  3 
Session Profit/Loss  $188  $281  $373 
Based on the above table being your session target, let’s see how that plays across 5 sessions.
5 Sessions  $188/Session  $281/Session  $373/Session 

0 Session Loss  $940  $1405  $1865 
1 Session Loss  $564  $843  $1119 
2 Session Loss  $188  $281  $373 
3 Session Loss  $188  $281  $373 
4 Session Loss  $564  $843  $1119 
5 Session Loss  $940  $1405  $1865 
With a 70% payout you need 14 winning trades to equate to a daily win, or 3 losses in a row to equate to a daily loss. With an 85% payout your wins needed per day to be a win is reduced to just 10, your daily loss remains the same though at 3 in a row. Those are the numbers and these days there is more and more competition in the Binary Options Broker world and higher returns are being provided than before. 70% really is the low end of what you will have to deal with and what you will find.
The Binary Options Martingale Worksheet
Here is a Binary Options Martingale Worksheet for you to use. It is an Excel file and all you have to do is enter values in to the top 3 black cells, the rest will be done for you. (click the image to download)
The Martingale Conclusion
If you have the correct skills you will find it hard to lose 3 in a row. Understanding your own daily or session capabilities will help you decide if this is even for you. Just remember that martingale trading also brings extra psychological issues along with it, if you are not confident in what you are doing then make sure you use a demo accounts to build some. Respect the martingale and spend the time to figure out if you should use it now or leave it to be revisited later on once you have more experience / personal results to study.
Famous martingale strategy
It is more of a system then a strategy that is used in various fields and it is known for a long time, it could very well be one of the most known strategies. It is originating from France where they played a game of coins in q8th century where a player would win if the coin he tossed turns up heads and it loses if coin comes around on tails. As you see it has nothing to do with trading but you can apply it to trading. To simplify things, if this player wins then it is ok, he can go and spend the winnings but if he loses, he has to double the bet and win in order to cover the loss. Let us take a look at the example:
Starting with 1$ bet. Coin flips and is a loss, so the next bet is 2$. This way the player ensures that if he wins now, he covers for previous loss and also makes 1$. Now, he lost again, therefore he has to double the previous bet, which is 4$ now, which will cover his previous loss and also make him 1$ of profit. This can go on and if doubling the initial money would go on it would look like this: 8$, 16$, 32$, 64$, 128$, 256$, etc… Eventually it should win and cover the losses. This is the explanation on what in essence martingale strategy is.
WHY IS IT BAD AND WHY IS IT GOOD?
In theory it may sound good but think if 5, 10 or 15 strikes of loss occur, which is very possible. What to do then. Means that you would need a hefty amount of money in order to profit from such strategy and it can go out of control really fast. It is based on pure luck as tossing coins is. But there is also some hope aswell for it.
You need to also know that this is mathematically proven fact that eventually you should win. Loss after loss just means that you are closer to a win that is why you should keep in betting. Problem with this plan is that, as we have already pointed out, infinite amount of money and other hand also time but it is not as much as important as money is. No one from us has infinite money, otherwise we would be enjoying on the beach. But also, a trader does not gamble, he wants to put the percentage of win in his favor, that is why he does the analysis and prepare for the trade. Imagine then, this strategy with a great analysis, this way it is more possible to win but you really have to be consistent and not a beginner in order give it a try.
FINALE
I would still suggest that you use this at extreme precautious. This is more of a money management strategy if you look at it this way. As we say it is possible to use this to turn into profits for yourself but the other way of loss is also possible so keep it in mind. You have to be extremely cautious when dealing with this kind of things.

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