Is martingale trading permitted?

2 min. readlast update: 12.23.2024

Yes, martingale strategies are permitted with limitation. We focus on educating traders and advocating sustainable practices. Aggressive averaging methods like martingale carry high risks, relying on the assumption of guaranteed wins while overlooking potential large losses. In contrast, investing equal amounts of money at regular intervals regardless of asset prices offer a methodical, risk-managed approach, aiming to mitigate market volatility and focus on long-term strategy.

Martingale entails opening multiple positions on the same instrument in the same direction during a drawdown of the initial position. It's identified as Martingale if any of the following conditions occur:

  • Subsequent positions are opened at a multiplier greater than 1x.
  • Subsequent positions are opened with varying volumes but at similar prices and times, resulting in a combined volume exceeding 1x of the original position.

Violating these conditions results in an account breach and challenge failure.

Please find examples below. These examples are provided solely to illustrate individual points and do not represent an exhaustive list of prohibited practices or scenarios.

Example 1 - considered martingale (not permitted)

  • 14:30, buy 1 lot XAUUSD at price 2100
  • 14:35, buy 1.2 lots XAUUSD at price 2098
  • 14:40, buy 1.4 lots XAUUSD at price 2097

 Example 2 - not considered martingale (permitted)

  • 14:30, buy 1 lot XAUUSD at price 2100
  • 14:40, buy 1 lot XAUUSD at price 2090
  • 14:55, buy 1 lot XAUUSD at price 2065

 Example 3 - considered martingale (not permitted)

  • 14:30:00, buy 1 lot XAUUSD at price 2100
  • 14:35:10, buy 1 lot XAUUSD at price 2098.23
  • 14:35:15, buy 1 lot XAUUSD at price 2098.35
  • 14:40:54, buy 1 lot XAUUSD at price 2097.45
  • 14:41:05, buy 1 lot XAUUSD at price 2097.67

 

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