Money management is something you need to be familiar with in order to become a successful trader. You will find many different strategies to choose from. It is a good idea to get the knowledge and then decide what suits best your needs and possibilities.
Today, I wish to present the anti-martingale system, which, as the name indicates, is somewhat opposite to the Martingale money management. You might have heard about the latter. If not, check the article about money management strategies.
Contents
The basics of the anti martingale system
Let's first remind you what the Martingale money management is about. Basically, it says that you ought to invest more money after you lost a trade. Also, you should decrease the invested amount in case your transaction was successful.
The anti-martingale strategy rules are the opposite. In the case of a lost transaction, you go to the beginning and start again from the amount you have started with. But then, you double the invested amount after the winning transaction.
In general, the anti-martingale money management will presumably earn a bit smaller profit than the Martingale. On the other hand, it is also less risky when compared to the Martingale. Your initial amount is at risk in a trade sequence and you simply use earned money to increase position size.
Trading with the anti-martingale system on the IQ Option platform
Apply the anti-martingale money management when you trade binary options on IQ Option. Remember, however, to follow a few simple rules.
RULES:
- Track your win Rate with Trade-logger
- The asset is minimum an 80% Payout
- Set your Maximum loses in 1 day
- Max 5% of account Balance
|
Trade Number:
|
Amount:
|
Difficulty
|
Average win rate
|
|
1
|
10
|
easy
|
–
|
|
2
|
18
|
easy
|
–
|
|
3
|
32.4
|
Mid
|
70%
|
|
4
|
58.32
|
Mid
|
75%
|
|
5
|
104.97
|
Hard
|
80%
|
|
6
|
188.95
|
Hard
|
85%
|
|
7
|
340.12
|
Crazy
|
90%
|
|
8
|
612.22
|
Crazy
|
95%
|
Your capital is $200. You make your assumptions about the direction of the price based on the market analysis and put $10 on a trade. The payout is 80% so, in case of a winning transaction, you add the profit to the previous amount and you invest $18. You won again, so again, you add the profit and you put $32.4 in the next trade.
Before you start trading using this method, you have to decide how many transactions you will conduct. You can choose to stop after 5 consecutive trades but it can be 3, 4, 6. It depends on the win rate of your past trades.
This compounding strategy can bring you a quite good profit. The longer the win streak, the higher earnings. I recommend beginning with 2 or 3 trades in sequence. This way you will still profit from compounding but it will be easier to manage your emotions at first.
Final words
You can count on relatively high earnings in case most of your transactions end up profitable. Of course, there is never a guarantee of what will happen in the market and whether your predictions were right or wrong. Nevertheless, it is very important that you are able to keep the money in your account. And it is just easier with the anti-martingale strategy.
Choose the assets that have at least 80% return.
Set a maximum amount you can lose in a day. It may be 1 to 3 times per day.
Do not invest more than 5% of your account balance so you will not wipe out the account completely. For example, if you have $200, your initial trade size should be a maximum of $10.
Use a tool that is called Trade-logger to track your win rate. If it drops below 70%, you should work harder to increase your win rate.
Always consider what is best for you. Get to know the strategy well by practising on a demo account. It is free of charge on IQ Option and you can use it as long as you wish. Once you feel confident with a method, move to the live account.
Share your views on the anti-martingale money strategy with us. Down below the site, you will find the comments section.
Best of luck!