Binary Options Martingale Strategy - Binary Options in Nigeria

The Martingale method 

The Martingale strategy is a capital management system, the principle of which is to increase your bets after you lose until you win! 

The principle of the strategy is elementary: let's say you bet $1. If you win, you get your money back. If you lose, you bet $2 next time to win back the one you lost. If you lose $2, you bet $4. If you win, you recoup your previous loss. If you lose, you increase your next bet. The idea is that sooner or later, a winning bet will happen, so you stay in the black.

The origin of the Martingale Method

A few centuries ago, a French mathematician set his sights on finding a winning method of playing roulette, i.e. wanting to beat the casino.  And he found it. The essence of the "method" comes down to doubling the initial bet after losing. That is the main principle!

Gamer doubles bets until the one winnings. The essence of the system is that no matter how many losses it was - just one win is enough to recoup all the losses and make a profit equal to the initial rate.

Binary trading on an online platform
Binary trading on an online platform

Examples of the Martingale strategy in action 

The initial bet is $1. If you lose, then bet $2. If you fail again, bet $4 (2x more)... $8... $16... $32... $64... $128.etc.

If you lose seven times in a row in the situation considered and win on the 8th, our result will be (-1-2-4-8-16-32-64 = -127$). Thus, the eighth bet gives us a profit of $128. In total, you have a net profit of $1.

The Martingale method is very popular with beginners. Most of the experienced traders treat it with caution or even negatively. There are reasons for the popularity of this method among beginner traders.

What does each beginner dream about? A simple, precise and "win-win" method. The Martingale strategy seems to be such a magic method. Indeed, why read books, improve yourself, study trading strategies and systems when you can double the bet after losing and be in the "golden zone".

Another reason why traders are keen on Martingale is psychological.

Everyone hates to lose. With Martingale, the problem of losses is solved with "one-hit" (one win).

In the example above, thanks to the Martingale strategy, the trader got out of a series of 7 losses due to one profitable trade. In a normal situation (without doubling), eight profitable trades in a row would be needed to close the losing streak. So, psychologically speaking, Martingale is a way to get out of losses as quickly as possible.

Of course, the prospect is very tempting. However, trading involves risk, so any strategy must be used competently to avoid losing money.

Choose an asset for binary trading
Choose an asset for binary trading

The Martingale strategy for binary options

The Martingale strategy for binary options is a popular strategy among traders. In both cases, it seems so easy to make money. All you have to do is predict as to where the price will go. 

The theory of probability says that in 50% of cases, the result will be correct. That means you need to double your next bet to cover your losses. Well, or increase by odds over 2 to make a profit. Why bother with technical or fundamental analysis if you can make money literally within a few trades using the Martingale strategy in binary options? That is the main misconception. 

Example:

  • With a deposit of $100. The trader places a bet with a lot of $2. He takes a loss and doubles his bet.
  • The next bet is $4. A further bet of $4.00 at 90% yield will bring in a profit of $3.6. The next bid of $4.00 will result in a profit of $3.6. The net profit, including the loss on the first trade, will be $1.6. USD.
  • Continue doubling down in case of a loss. Already the 6th bet ($64) will only be possible if another $26 is added to $100. A further $26 will be added.
  •  A total of 6 tries would be enough to lose $126 on a Martingale for binary options. Thus, the amount of money that would have been lost would have been $126. Moreover, if the 6th forecast turned out to be successful, the profit would be $57.6. On the other hand, the loss on previous trades would have been $62. That is, even the 6th profitable position would not pay off the last 5.
  • It turns out that one can make money on Martingale only if one increases the bet by odds higher than 2.

Rules of using the Martingale strategy for binary options

The Martingale method for binary options is not as dangerous as it seems at first glance. You do not have to be familiar with technical analysis to implement it. All you need to do is choose your lot multiplier wisely. You have to deposit at least 100 times your initial bet. The expiry time of an option is from a few minutes. Trading turbo options is prohibited due to volatility and price noise. 

Rules of using the Martingale strategy for binary options

The Martingale strategy for binary options is not as dangerous as it seems at first glance. You do not have to be familiar with technical analysis to implement it. All you need to do is choose your lot multiplier wisely. You have to deposit at least 100 times your initial bet. The expiry time of an option is from a few minutes. Trading turbo options is prohibited due to volatility and price noise. 

Rules for applying the Martingale method for binary options:

  • Correct calculation of the odds. The strategy will show the average and maximum series of profitable and losing trades from backtesting. Based on this, the coefficient by which the next trade will be multiplied so that the whole series of profitable trades overlaps the string of losing trades. This principle is implemented in the code of many Expert Advisors;
  • Trading using this strategy in volatile markets is strictly prohibited, where technical analysis is replaced by fundamental analysis. Do not trade on the Martingale during news releases, in the last few hours before the weekend, and in the first hours after the weekend;
  • Do not trade during a flat market.

To find out if you are ready to implement this strategy, you need to answer a few questions:

  1. Are you willing to accept losing your entire deposit?

  2. Have you tested and evaluated your strategy in terms of statistical and mathematical analysis?

  3. Have you made a calculation table for yourself on Martingale coefficients, which considers the series of trades? 
Choose an indicator for technical analysis
Choose an indicator for technical analysis

Technical analysis for binary options

When trading binary options, you have to do at least a little technical analysis to guide you in the direction of price movement.

Some inexperienced investors believe that if the price went up, it would soon go down. But it is not that simple. Successful traders adhere to specific rules, which help to receive accurate profits.

One of the main conditions of successful investing is accurate forecasting of price changes in the future period. Consequently, it is necessary to carry out a thorough analysis before investing. One of the most common methods of analysis is technical analysis, which will be discussed below.

Technical analysis for binary options

When trading binary options, you have to do at least a little technical analysis to guide you in the direction of price movement.

Some inexperienced investors believe that if the price went up, it would soon go down. But it is not that simple. Successful traders adhere to specific rules, which help to receive accurate profits.

One of the main conditions of successful investing is accurate forecasting of price changes in the future period. Consequently, it is necessary to carry out a thorough analysis before investing. One of the most common methods of analysis is technical analysis, which will be discussed below.

Basic concepts of technical analysis in binary options trading

Trend lines can be of three types - bullish (uptrend), bearish (downtrend) and sideways or flat (also known as flat).

  • In a bullish trend, the asset price is going up, so you need to buy options such as UP / CALL / UP.
  • In a bearish trend, the value of the asset is going down, so you should invest in DOWN / PUT / LOWER options.
  • If the price chart is flat, you should only refrain from investing if you have no information about where the price is heading in the future (if you have insider information, etc.).

However, the price is highly volatile, and one trend can be reversed in a short time.

Use the news on the platform for fundamental analysis
Use the news on the platform for fundamental analysis

This is reflected on the charts in the form of waves that are formed on it.

Another basic notion of technical analysis is volatility which shows how much volatility there is in the price, i.e. how strongly the cost of an asset rushes from one side to the other. The higher the volatility, the more volatile the price movements will be, and the more zigzags will appear on the chart. Conversely, the less volatile an asset is, the more stable its price movement.

Over the years, the arsenal of technical analysis has been enriched by many rules, criteria and laws.

Use strategies based on technical analysis to make money. You can combine the Martingale system for binary options with various other strategies to be more reliable. You can also combine different techniques and signals for binary options. That will give you great opportunities, which you will be able to realise at your broker.

Market rules, which were applied in the past, are still valid now, and they will also apply to market movements in the future. Therefore, binary options technical analysis is excellent at predicting future trend trends. That fact is a fundamental factor when using the Martingale system for binary options. 

How to start using the Martingale strategy in Nigeria? 

If you want to start using a Martingale strategy, you need to choose a broker. Choosing a good and reliable broker will guarantee you safe trading. Then, register online, providing some of your information so that platform can identify you. It won't take you long. 

Registration to the investment platform
Registration to the investment platform

Demo account

If you want to learn how to use the Martingale strategy without losing money, the platform allows opening a free demo account. With a demo account, you will be able to apply all the knowledge and test the effectiveness of the strategy you have chosen. 

How to open demo account
How to open demo account

Real account

Of course, trading on a real account does not compare with trading on a demo account. But if you already know you're ready to trade with real money, open a real account. All you'll need to do is make a minimum deposit. 

So good luck and have thriving trading.

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