• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer

Toro Demo Trading

Platform How To

Never invest money that you can’t afford to lose.

RISK WARNING: 68% of retail investor accounts lose money when trading CFDs.

This website is created by fans of the eToro platform. Not by eToro itself.

  • Trading Basics
  • Platfrom Guides
  • Strategy
  • Trading Tools
    • Forex Market Hours
    • Trading checklist
    • Trading Balance Growth Calculator
    • Martingale Calculator + Strategy explained
    • Calculate your first Million
    • Gain-Loss Percentage Calculator
    • Forex Tools for trading
    • Economic Calendar
    • Technical summery Currency pairs Buy and Sell
    • Crypto Currencies top-10 Active Price Movement
  • Video tutorials
  • REGISTER / LOGIN

Mastering Martingale Strategy For Trading




(NOTE: Before we continue, we have to give a disclaimer that the trading products offered by the companies listed on this website carry a high level of risk and can result in the loss of all your funds. CFDs are complicated instruments that are never guaranteed to provide you supplemental earnings.  In fact, Around 68% of all retail investors experienced a loss while trading CFDs. Make sure to keep this in mind before attempting to use the eToro platform yourself. All the information found on this website is not official trading advice and all practices shown are referenced for the use of the Demo account only.)


 

If you’re a trader then you’ll definitely be looking for ways to make your strategy or system more resilient against losses and bad trades. For the novice trader, risking all their money would be their best strategy to win big – unfortunately, this often results in failures and huge sums of losses. The experienced trader on the other hand considers trading in small amounts and increase amounts gradually depending on the system or strategy which they are using. Among the most common strategies that use this kind of approach is the Martingale strategy – it’s a strategy that is not only used in trading but also in betting or gambling. In this article, we’ll share with you the best features of the Martingale strategy, how to use it on regular trading along with the tools you can use to apply this strategy.

Contents

  • 1 So, what is the Martingale Strategy?
      • 1.0.1 How to use the Martingale Strategy in an actual trade
      • 1.0.2 The drawback
  • 2 Taking precautions using the strategy
      • 2.0.1 Consider only full-bodied candles
      • 2.0.2 Consider up-trending patterns
      • 2.0.3 Consider other indicators

So, what is the Martingale Strategy?

Simply put, the Martingale Strategy is about doubling the size of your traded value every time you get a losing trade or bet. This strategy points out that you cannot lose all the time – or there is a limit to the number of times you can lose in a trade or bet. With every losing trade or bet, you double the size of your investment until you arrive at that winning trade which will cancel out all the losses and will give a profit or gain.

This was introduced by Paul Pierre Levy – a French mathematician and this strategy revolve around the principle that regardless of the number of losses, a single winning trade can turn the tables around.

Of course, every strategy involves risks and the Martingale strategy also has one which can be financially devastating without diligent preparation. The great risk in using this strategy is that one must have a good financial backup or supply of money in the account to handle the accumulation of losses before the win. Remember that for every loss, one must double the investment in order to win back all losses and gain profit. Unfortunately, this strategy does not provide many gains and may cause your account to go bankrupt. In spite of these drawbacks, however, there are certainly a few ways on how to increase the chances of winning and gain good profits using this strategy.

How to use the Martingale Strategy in an actual trade

The first thing to note when using Martingale Strategy for trading is to consider only the “true candles”. A true candle is a candlestick which contains a wide part and almost without a wick on both ends – this body of the candle is also called the “real body”.

For our example, let us use the stock AMAZON on eToro.

To apply the Martingale strategy on trading, you’ll have to consider all types of red candles as a loss – regardless of their pattern. The same goes with the green candle which is a win – regardless of the tails, opens, and closes.

Let’s say you have $10000 in your account and, you start to buy AMZN stocks for $5.
Using the Martingale calculator, you will be able to track how much you should spend on each losing trade and your chances of losing a trade.

Upon purchasing the stock, you spent $5 as your initial investment. At the next trade, you get a loss and with that, you double your investment to $10. And on the third trade, we see in the image that you made another loss which brings you to another double the amount – now giving you $20. Unfortunately, the fourth trade is also a loss which brings you a double in the previous trade which is $20 x 2 = $40. Soon after the fifth trade, you get a win which not only pays back the $40 investment but also a small amount of profit due to the huge increase in the price range.

Basic Martingale Strategy

As far as the basic application of the Martingale strategy is concerned, we can see in the example that the strategy is easy and uncomplicated. After every win, the trader can start over again with the strategy. This basic strategy can help you gain wins even though in small amounts. Despite the risks of losing, one is always ensured of a win at the end which cancels all incurred losses.

The drawback

Although this strategy may seem reliable not only in the field of trading but also in gambling and betting, it actually has one major drawback. The major flaw of this strategy is that it is not effective for steep down trending stocks. And as we know, if you get a stock that is down-trending, you encounter a string of losses. Using this strategy over the long series of losses, you will also need to spend more as you double your investment on every loss. Unfortunately, there is a limit to what you have in your account. And you may face the time where you can’t double the price on your last losing trade.

So, the major requirement of this strategy is that it requires a good and solid amount of financial backup or money on your account. Unfortunately, not all have this kind of luxury. So, is there a way to make this strategy more useful and safer? There is!

Taking precautions using the strategy

There are actually a few tweaks that you can add to this strategy to make it more effective and to reduce the risks. They are as follows:

Consider only full-bodied candles

Full-bodied candles

One thing that you can add to this strategy to lessen the risks is to focus only on the full-bodied candles. Full-bodied candles are better-preferred candle formations because they highlight the difference between the opens and closes in a trade. The good thing about using full-bodied candles is that you get to reduce the instances of doubling the amount on every loss. On the image, we can see that we’ve only doubled the investment twice before getting a winning trade. While you can focus only on the full-bodied of the losing trades, you can also consider the full-bodied candles for winning trades for higher potential gains.

Consider up-trending patterns

Up-Trending Stocks

The next thing to do in order to reduce risks in using this strategy is to consider stocks that are on an up-trending pattern. Up-trending stocks are easy to identify as they are the stocks that are moving up or climbing up in the chart. The good thing about this type of stock pattern is that you know the stock is moving up, it may lose a few trades but there will be great chances for it to move up thus winning a trade.

Consider other indicators

You may also want to consider other indicators when using the Martingale strategy to increase the chances of gains and reduce risks. A few indicators that you can use are the Support and Resistance indicators to know your trading range – you can either start or stop at the Support or the Resistance. Support and Resistance indicators also provide you with good signs of when to buy and sell. You can also use other indicators such as MACD, RSI, and moving averages to pinpoint stages or levels where you can double your trades upon losses.

The Martingale strategy is indeed a great road to take provided you are equipped with enough ammunition as back up. With that being said, it may not be the best strategy to use if you are starting out with a small amount in your account. However, the strategy can indeed be modified to lessen the risks and increase the chances of getting that one single trade that wins all losses back.
So, while other traders do not advise using the Martingale strategy because of the risks involved, it actually depends on how it is used. Using the considerations mentioned in this article, you will be able to lessen those risks and you will be more confident in executing your decisions when trading.

Master this strategy on your Practice Demo Account Before you start trading on your Real portfolio is advised.

75% of retail investor accounts lose money when trading CFDs


Support us by using the eToro sign-up form down below.⬇️

Plus you will get a Free demo account! Thank you!??etoro sign-up form

 

 

 

 

 

 

 

 

 

 

 

 

 

 

eToro is a multi-asset platform that offers both investing in stocks and crypto assets, as well as trading CFDs.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.

Copy trading is a portfolio management service, provided by eToro (Europe) Ltd., which is authorized and regulated by the Cyprus Securities and Exchange Commission.

Cryptoasset investing is unregulated in some EU countries and the UK. No consumer protection. Your capital is at risk.

eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity-specific information about eToro.

How useful was this post?

Click on a star to rate it!

Average rating 4 / 5. Vote count: 4

No votes so far! Be the first to rate this post.

As you found this post useful...

Follow us on social media!

We are sorry that this post was not useful for you!

Let us improve this post!

Tell us how we can improve this post?

You might also want to read

millionaire calculator

Calculate your first Million

To succeed in every trade has always been the dream of every trader. And to realize this dream, one … [Read More...] about Calculate your first Million

de ratio eToro

A Deep Dive Into Debt-Equity Ratio

The debt-equity ratio is measured by dividing an organisation's complete debt by its stakeholder … [Read More...] about A Deep Dive Into Debt-Equity Ratio

Long Term investment

Discover your trading style on eToro

A trading style, not to be confused with a trading strategy, describes the way in which an investor … [Read More...] about Discover your trading style on eToro

Moving Averages on eToro

Moving average indicators on eToro

What is a Moving Average Indicator? Moving Average is one of the simplest indicators used in … [Read More...] about Moving average indicators on eToro

Morning Star Pattern vs Evening Star Pattern

How To Trade The Morning Star Pattern And Evening Star Pattern on eToro

The use of candlestick patterns has been among the best strategies used in trading to gain profits … [Read More...] about How To Trade The Morning Star Pattern And Evening Star Pattern on eToro

Primary Sidebar

Open Free eToro Demo acount Now!

etoro sign-up form

RISK WARNING

68% of retail investor accounts lose money when trading CFDs. 

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Past performance is not an indication of future results.

eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.

Trending Posts Now

  • eToro trading
    eToro Club Tiers – Why and what to know about them
    October 25, 2020
    By Bart Bregman | 0 Comments
  • Etoro Review
    eToro Review 2020 – The Lazy Traders’ Guide to Know Everything
    October 26, 2020
    By Bart Bregman | 0 Comments
  • Fees and commissions
    eToro Fees and Commissions
    October 26, 2020
    By Bart Bregman | 0 Comments
  • Trading Balance Growth Calculator
    Trading Balance Growth Calculator
    December 7, 2020
    By Bart Bregman | 0 Comments
  • Leveraged trading
    Trading using Leverage on eToro
    November 1, 2020
    By Bart Bregman | 0 Comments
  • EMA Indicator
    Guide to Effective Trading Using the EMA Indicator on Toro Demo
    February 23, 2021
    By Bart Bregman | 0 Comments
  • Shorting, Selling and Closing
    Short selling and closing on eToro – What’s the difference?
    November 20, 2020
    By Bart Bregman | 0 Comments
  • cfd profit etoro
    Calculate Your Profit – CFD Trading On eToro
    December 4, 2020
    By Bart Bregman | 0 Comments
  • Candle Patterns
    Most Traded Candlestick Patterns on eToro
    April 4, 2021
    By Bart Bregman | 0 Comments
  • etoro chart tool
    Chart Your Course To Success On eToro
    November 30, 2020
    By Bart Bregman | 0 Comments

Footer

  • About Us
  • Contact us
  • Sitemap
  • Earnings Disclaimer
  • Privacy Policy
  • Privacy Policy – Toro Demo Trading app
Bear Markets eToro

Despite bear markets being a natural period of a market cycle, it may be hard to anticipate such … [Read More...] about Trading in a Bear Market on eToro

Long Term Chart Patterns

In the forex and stock market industry, prices will always fluctuate in a consolidation or … [Read More...] about Top 5 Candlestick Patterns for Long-Term Trades on eToro

eToro portoflio planning

Many investors are looking for a long-term investment opportunities that would be optimal to their … [Read More...] about A Step-by-step approach to eToro portfolio planning

eToro portfolio balance

It may be easy to think that a long-term investment into a portfolio of assets is a one time 'do and … [Read More...] about How to re-balance your eToro portfolio?

Flag Pattern

If you’ve ventured into trading, you’ve likely encountered candlestick patterns. Candlestick … [Read More...] about Understanding Flag Patterns and How to Use Them On eToro Trades

Grow etoro portfolio

Some investors are able to generate returns on their investments without their portfolios growing … [Read More...] about 7 strategies to Grow your portfolio

GENERAL RISK WARNING
The trading products offered by the companies listed on this website carry a high level of risk and can result in the loss of all your funds.
You should never trade money that you cannot afford to lose.
Please Be aware that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
68% of retail investor accounts lose money when trading CFDs.
Copyright © 2023 Torodemotrading.com

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish.Accept Read More
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are as essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled

Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.

en English
af Afrikaansar Arabicbn Bengalibg Bulgarianzh-CN Chinese (Simplified)zh-TW Chinese (Traditional)cs Czechda Danishnl Dutchen Englishet Estoniantl Filipinofi Finnishfr Frenchka Georgiande Germanel Greekhi Hindihu Hungarianid Indonesianit Italianko Koreanms Malayno Norwegianpl Polishpt Portuguesero Romanianru Russianes Spanishsv Swedishth Thaiuk Ukrainianur Urduvi Vietnamese