Doubling size after each loss to recover with one win; mathematically guaranteed to blow up an account with finite capital.
A martingale doubles the bet after every loss so that the first win recovers everything plus one unit. Grid and recovery expert advisors in forex are built on it, and so is every "cannot lose" system sold in a screenshot.
The maths is not ambiguous. Starting at $100, a losing run costs 100, 200, 400, 800, 1,600, 3,200, 6,400: seven losses need $12,700 of capital to keep doubling. Seven consecutive losses at a 50% win rate happen roughly once in 128 sequences, and streaks cluster because markets trend. The strategy produces a long series of small gains and one total loss, which is why the equity curve looks superb right up to the day it ends.
Be blunt with yourself: a martingale does not improve expectancy. It moves the loss from many small ones into one unsurvivable one, and it maximises risk-of-ruin for any edge. There is no account size that fixes it.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Expectancy: the average trade. Forty trades sorted by outcome: 24 small losses and 16 larger wins. Weighting each side by how often it happens gives the average result per trade, marked here by the dashed line at +$120.Equity curve and drawdown. An account balance plotted month by month. The fall from the $16,000 peak to the $12,000 trough is a 25% drawdown, and the shaded area lasts until the balance climbs back to the old peak.
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