What is Forever Profit Trading?

In the recently released movie "All or Nothing", Wang Dalu has already told you a way to calculate the winning rate. This calculation method is collectively called the Martingale transaction.

So what is a Martingale deal? If you have any big doubts about this, let me explain it to you. This is also the most commonly used trading strategy in gaming competitions.

The method is this: first find a game similar to guessing the size (one pays one), and bet 1 yuan per game. If you win, the game is over; if you lose, you continue to bet 2 yuan in the second round. If you win the second game, the game is over. If you lose, you continue to bet 4 yuan in the third game.

By analogy, if you win, it's over. If you lose, you double your bet until you win.

In this way, the money won will always be 1 yuan more than the money lost, and you will always make a profit when you end the game.

This seemingly "guaranteed" strategy is called the "Martinale Strategy"

How to use the Martingale strategy in investing?

Suppose we believe that a certain currency has the potential to rise, buy 100 dollars at the current price of $55, and use $5 as the interval for adding a position.

Over the next few days, the price began to fall. For every $5 the price of the coin fell, we bought double the number of coins on the previous level. Until the price dropped to $35, we already held $3,100. At this time, the price began to rise. When it rose to $40, we sold all the positions.

We can find that the advantage of Martingale strategy is that it can help you save time and capital costs in volatile market conditions.

As the underlying price continues to fall, your position cost will become lower and lower. At the same time, as long as the price rebounds slightly, you can immediately turn losses into profits and exit at profit.

But on the other hand, the disadvantages of this strategy in unilateral market conditions are also obvious.

If the underlying market is in a unilateral upward trend, and the overall position is small, using the Martingale strategy may not allow you to make a lot of profits.

If the underlying stock is in a unilateral downward trend, using this strategy requires you to keep doubling your position to cover your position. Your cost price will gradually decrease in the process of adding more positions. As long as it rebounds a little, your cost advantage of doubling your position to cover your position will be revealed. So, It can be called a "permanent profit strategy", but this method involves huge investments and suffers huge losses; even if the price rebounds, the final profit from the exit is not high, and the overall risk-reward ratio is not high. Suitable for users who can withstand high losses and large amounts of funds, but not suitable for small amounts of funds

In theory, if there is no limit on funds, the Martingale strategy cannot lose. But in real trading, our funds are limited. Even if we have tens of millions of funds, we are helpless in the face of large unilateral market conditions, and we will only end up with the fate of being liquidated.