Martingale trading.

Martingale trading is derived from martingale betting where the gambler doubles his bet after every loss. The idea behind this is that eventually their will be a bet won and the profit will be the initial bet. Imagine flipping a coin. If its head you double your bet, if its tail you loose the bet. After a winner the whole process starts over again.

example.
stake 1$ => tail = lose
stake 2$ => tail = lose
stake 4$ =>tail = lose
stake 8$ =>head => win = 2X8$=16$ - stakes (1+2+4+8)=1$ profit

In trading their are 2 basic martingale systems.

The first is called position size martingale trading. In this case the trader doubles his position size after every loosing trade.  Of course everybody knows that you can have a series of loosing trades and that you will have an to big position size at the end of a long series of looser. So how do you use martingale position size trading without taking unnecessary big risk. Imagine that a trader is used to trade standard lots and he wants to try out a strategy with a martingale position size. The best thing he can do is to start trading a lot smaller. Instead of standard lots mini lots or even micro lots. In this case he can double his position size multiple times before he is trading with his normal position size.

The second is called profit target or stop loss martingale trading. To explain everything simple imagine a trader that has a profit target equal to his stop loss. Instead of doubling his position size he doubles his profit target and stop loss after each loosing trade. He hopes that eventually he will have a winning trade the profit will be his initial profit target.

The main difference between these 2 basic systems is that in the second case the trader stays longer in the "game"'

How do you use a martingale system in a "healthy" way in a CTL strategie.
- decide what you maximum acceptable loss is (maxloss)
- decide how many time the strategy can double the position.(x)
- you need a strategy that hasn't long series of loosers.

example mini lots and only doubling 4 times is allowed
1 mini lot
2 mini lot
4 mini lot
8 mini lot
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loss after 4 loosing trades is 1 + 2 + 4 +8 = 15 mini lots or 1,5 lot
after 4 loosing trades the strategy start with 1 mini lot again

Anti-martingale trading :  Anti martingale trading is when a trader reduces his trading size after a loosing trade and double his trading size after a winning trade. This way the trader tries to benefit from a winning series.