Martingale strategy for binary options
The Martingale method
One of the most famous strategies in the financial markets is the Martingale strategy. Traders regularly use the Martingale strategy in both binary options trading and forex trading. As a result, traders have an opportunity to calculate expenses and income in advance. In addition, professionals say the strategy is easy to use. How to trade based on its principles, we will consider in the article.
The Martingale theory came to the world of traders from the 18th century, when gamblers used it. For example, in a game of chicken flies, where you have to guess whether a coin will fall on heads or tails. The odds of winning are equal, i.e. 50/50. In this case, using the Martingale method, the player doubles his bet after each loss until he wins. This way, he not only recovers his losses but also makes a profit. After restoring his financial position, the player starts all over again.
The essence of the Martingale method is to increase your bet when you lose. Then, doubling continues until you win, and it all starts again with the original bet.
How does the Martingale system work?
Experienced traders do not gamble but use the Martingale method as part of their strategy to diversify their risks. And they make a good living at it.
The opinion behind the Martingale strategy is pretty easy. It is a negative progression system that includes growing the size of your position after you waste.
Specifically, it means doubling your position if you lose. The classic Martingale progression scenario is trying to trade a result with a 50% chance of it. Such a scenario has zero expectations.
You expect to do nothing and lose nothing in the long run. In this '50/50 position', there are two ways to learn how to size your position.
Today, the Martingale method is actively used in various types of gambling, forex trading, binary options or stock trading. However, over the years of practice, there have been many myths, contradictions, boisterous statements and denials among this technique, which are pretty difficult to confirm and exclude. This is because the method can perform differently in different situations and is not a ready-made set of rules, just a betting technique.
Martingale strategy for binary options
To learn how to apply a martingale strategy for binary options, you need to know binary options trading laws. That will make it easier to know how to use the martingale method to binary options.
The main points when trading binary options
- Familiarise yourselves with the basic concepts and terms.
The global mistake all beginners make is that they do not care about theory and knowledge. Instead, they want to get their hands on a ready-made tool and earn money here and now.
You have to become clear about what binary options trading is and what is meant by the term binary options, what kinds of options and how you interact with your broker. Know the basic terms and take off the rose-coloured glasses to understand what the stock market is all about!
Bulls, bears, trend, flat, broker, volatility, expiry - these terms should not be a question for you! In one way or another, all educational literature is based on the fact that one must understand the basic concepts.
When studying a strategy aimed primarily at beginners, you will constantly bump into these terms, and you are nowhere without them.
- Trading binary options without a systematic approach and plan of action is the way of the amateur and will result in lost deposits, frustration and bitterness!
Extreme: the dilettante convinces himself that binary options trading is a scam and no one makes money here. Everyone is lying. But the reality is that in this case, only one person lies - the dilettante himself!
And he lies to himself, he justifies his laziness, his unwillingness to study, and the trader hides the fact that he has nothing except the desire to get rich.
If you want to become a professional trader, you must have several trading strategies or create them yourself.
- Introduction to money management as well as to the psychology of the market.
Many traders have a habit of blaming all their failures on strategy, broker, news. But, in reality, even more than the strategy itself probably depends on money management skills.
Also, do not forget that the market consists of money and real people, who are on the other side of the screen, so you need to predict the actions of other traders and understand when fear and greed are the rules!
Studying the psychology of the market will help you properly analyse the crowd's behaviour and work on your shortcomings, which are inherent to any person.
- Technical Analysis.
Technical analysis is a fundamental and critical stage of analysis as it allows you to clearly determine whether the current trend is up or down. Financial analysts use many tools, such as basic technical analysis figures or various indicators, to identify the type of trend and its long-term nature.
When to use the Martingale strategy in binary options?
The basic principles on which to base martingale strategy for binary options:
- The market never stands still;
- The market is always trending;
- Never trade against the trend;
- Watch out for economic news and do not trade before the news releases and for a while afterwards;
- Only trade with the Martingale method during the European and American sessions.
The news has an unpredictable effect on the market, so it is best to refrain from trading when the critical economic report is released.
The Martingale method for binary options trades only in the direction of the primary trend (movement) and never against it! Therefore, it is better to change the asset or the expiry time to make a guaranteed and safe profit.
Martingale strategy is a good one for beginners, but it is essential to understand some points:
- Apart from this, many other strategies can be used with the Martingale system for binary options.
- There is no such thing as a 100%-profitable trade. You can make a mistake, and you will cause a loss. The main thing is to stop in time and get your act together.
- Make sure you learn how to trade! Don't stop learning!
How to apply the Martingale system for binary options?
The main thing for a trader is to get the direction of the trend right. The Martingale system helps to cover unpredictable losses caused by wrong trend moves.
The Martingale strategy for binary options is applied as follows:
- Analyse the market and pinpoint the direction of the trend;
- Check if there will be any important news on your trading asset that can affect the trend soon;
- Buy options only in the direction of the trend;
- If the option closes in the positive direction, buy the next option;
- If the option closes in a negative, buy the next one with double the amount;
- Then we close in profit and start again with the initial amount;
- Again we are in deficit; we double the sum once again;
- Again a loss, and there is almost nothing left from the deposit?;
- Finish the game and go learn to trade!
That is the main contrast between trading with Martingale and gambling! In gambling, you cannot predict where the roulette wheel will stop, what card will fall or how the dice will fall.
And you are determining the trend before trading is a trading axiom! So first, you should learn to understand the trend moves and then start to trade with real money.
The most distinctive feature of binary options is that you need to make a simple technical analysis and identify the trend!
How to start using the Martingale strategy in Qatar?
If you want to start using the martingale system for binary options, working only with trusted and reliable brokers is essential. So choose a broker and register on the website.
Examining the Martingale strategy for binary options on a demo account helps answer the most critical question about the profitability of the strategy, indicator, market analysis technique you have chosen!
Nowadays, there are many different programs and possibilities to test a strategy for profitability before you start risking real money.
The profitability of the Martingale strategy in the past does not give a 100% guarantee that everything will be successful in the future. Still, nevertheless, you will get precious experience, gain confidence in yourself and your actions, and see all the subtleties of the strategy.
Trading binary options on a real account are almost different from trading on a demo account, except for the psychological burden. That is why it is important not to remain a theorist for too long but to finally move from preparation to action and achieve the desired result!
A beginner who decides to engage in professional binary options trading faces enormous challenges in the form of unstructured information and untrue information surrounding this activity.
At the same time, you have to continue your development, study the market more deeply, learn new analysis directions, get acquainted with analytics and constantly strive for perfection.
If you are just at the beginning of your journey to becoming a trader, or if for some reason you have not been successful in trading binary options, traders suggest not to despair. Instead, read the article and add it to your knowledge. Remember, success depends on you and your determination.