Investor's wiki

Anti-Martingale System

Anti-Martingale System

What Is the Anti-Martingale System?

The anti-Martingale, or reverse Martingale, system is a trading methodology that includes halving a bet each time there is a trade loss and doubling it each time there is a gain. This technique is something contrary to the Martingale system, by which a trader (or player) copies down on a losing bet and parts a triumphant bet.

The two systems are trading strategies normally utilized in the foreign currency markets yet can be applied somewhere else.

How the Anti-Martingale System Works

The original Martingale system was presented by French mathematician Paul Pierre Levy in the eighteenth century as a method for expanding the statistical outcome setting a series of dangerous wagers. In a Martingale strategy a speculator or trader duplicates his bet each time he loses, and desires to recuperate those losses and create a gain with a positive bet in the end.

Then again, the assumption of the anti-Martingale system is that a trader can rather capitalize on a series of wins by doubling his position.The anti-Martingale system acknowledges greater risks during periods of broad growth and is viewed as a better system for traders since it is safer to increase trade size during a series of wins than during a losing streak. This type of reasoning might fall into the "hot hand fallacy" trap, however when markets are trending up, the anti-Martingale system could find lasting success for a trader, who might take out a series of positive trades before a loss intrudes on his streak. In any case, a doubling down on a given winning bet opens him to a single large loss that might clear out previous gains.

At the point when there is a loss you wind up cutting a losing bet in half. Here, a trader is in effect rehearsing a stop-loss discipline that is generally suggested in trading. The anti-Martingale system is to some degree a play on the Wall Street saying of "allowing your victors to run and cutting your washouts early." It might work well for during energy driven markets, however markets can turn rapidly against traders. The Martingale system, then again, is even more a "reversion to the mean" scheme that might be more suitable in aimless, meandering markets.

Illustration of the Anti-Martingale System

To grasp the fundamentals behind the strategy, we should check an essential model out. Assume you have a coin and participate in a betting game of either heads or tails with a starting bet of $1. There is an equivalent likelihood that the coin will land on heads or tails, and each flip is independent (the prior flip doesn't impact the outcome of the next flip). Accept you generally bet on heads.

On the off chance that the primary throw is for sure a heads, you will win $1 and afterward bet $2. Assuming that it is again heads, you will be $4 on the next flip. It is tails, thus you will split your next bet and bet $2 again.


  • Inverse of the traditional Martingale system, the anti-Martingale strategy includes doubling up on winning wagers and decreasing losing wagers by half.
  • It basically a strategy that advances a "hot hand" mentality when on a series of wins and a stop-loss strategy when there is a losing streak.
  • The anti-Martingale system is a methodology to enhance series of wins and limit the impact of losing streaks.