Most people who use the Martingale strategy in Fixed Time trading on Olymp Trade lose money. Do not try to test or prove the opposite. Because you will definitely be the next one to lose money for Olymp Trade.
And in this article, I will give specific evidence about the case of losing money which has been sent to How To Trade Blog website. At the same time, I also want to make a point. If you want to use Martingale strategy, use it for Olymp Trade Forex, not Olymp Trade Fixed Time.
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Some articles you need to read first
For the most detailed information about the Martingale method, please read this article: What is Martingale? Why do people say it is invincible?
Or, if you don’t know what Fixed Time Trade is, please read this article: What is Fixed Time Trade in Olymp Trade.
How did I lose money in Olymp Trade because of Martingale trading strategy?
I developed a Martingale-centric trading strategy. 1 cycle consists of up to 3 consecutive trading orders, with increasing amounts of capital at $5, $12, and $30. The total amount for 1 cycle is $47. This is equal to 10% of the total capital deposited to my Olymp Trade account.
- If I lose the 1st order with $5, I will open the 2nd order with $12. If I continue to lose the 2nd order, I will open the 3rd one with $30. And if I lose all 3 orders, then stop trading.
- If I win any of these orders, then that cycle ends. I will be back to the $5 order of a new cycle.
You can see a specific example in the image below:
With the Martingale strategy, if you are patient, it is easy for you to make money. But the problem is, for every winning cycle, the average profit is about $5. But if you lose 1 cycle (3 consecutive orders), that means you lose $47. So, if you lose 1 cycle, you need 10 consecutive winning cycles to recover the lost capital.
This is also my problem. This week, I use Martingale in Olymp Trade. I won 10 cycles and lost 2 cycles. The final result is I lost over $40.
Reasons for losing money when using Martingale strategy
Suddenly get limited on trading
This is considered the “most unlucky” case during trading in Olymp Trade. Normally, you can lose up to $500 or $700. It is not a problem. But if you win a few hundred dollars, the Olymp Trade trading platform may limit the amount of money traded on your account.
“You have exceeded the limit of the maximum amount for trading in 1 day.”
Martingale theory: If you lose, make a double bet until you win.
So for example, this account has lost 3 consecutive orders, you are raising the investment for the next order but getting limited. This means that the total capital is more than $150, but you can only invest an amount of $15.
In this case, the Martingale theory will be abandoned. And the ones who suffer are the traders.
Losing because of greed
The good thing of the Martingale strategy when trading in Olymp Trade is: If you are new and start “practicing” trading in Olymp Trade, or you are trading with small investments such as $1, $3, or $8, etc., it is very easy to win.
So why? The reason is simple: When you are new, you will be very careful in every transaction. And with a small investment, you will be very comfortable without any pressure when opening a trade.
But because of the small investment, the profit will not be high. At the same time, an easy win will make you more subjective. When greed arises, trading will become faster with larger amounts. That is when you “burn your own money”.
Emotions in Fixed Time trading
The lower the price is, the more you should open UP orders. Or vice versa, the higher the price becomes, the more you should open DOWN orders. As a trader, you will definitely understand what this is. This is getting caught up in and trying to go against the market.
In this case, if you use Martingale and increase the trading amount, the probability of “losing everything” is 100%.
Easy to go all-in with Martingale strategy
Martingale traders have a habit of going all-in (invest all the money they have). This is a proven fact.
The reason is simple: It is because of increasing the amount for transactions after each loss. The habit of changing the transaction amount will make it easy to go all-in.
To conclude
“The most important thing in trading is to keep the money.” It is not to make money at all costs.
Therefore, Martingale is really a risky strategy. I agree that you can make money. But if you are wrong just once, you will lose a lot.
Especially for new people, they have no skills, no patience, and no rules. If they apply the Martingale method, they will definitely burn out their account.
Why Martingale strategy is suitable for Olymp Trade Forex
Answers: Because Forex offers stop-loss. Simply understand, you can limit the risk for your account.
I will prove it to you by a long example. But please be patient.
Forex trading status in Olymp Trade
- Total deposit is $300.
- Stop-loss is 15%. Take-profit is 30%.
- Place at most 3 orders a week. If you win 1 of these 3 orders then stop trading that week.
How to use Martingale strategy when trading in Olymp Trade Forex
There are 3 orders traded within 1 week over the total capital of $300. We will use the Martingale method like this: $100, $150, and $220. So you will have the following 3 cases:
Case 1: Win at the 1st order
In the 1st order, you will trade with an amount of $100. The stop-loss is $15 and the take-profit is $30.
If you win, you can make a $30 profit and stop trading. The profit of $30 over the total capital of $300 corresponds to a profit rate of 10%.
Case 2: Lose the 1st order but win the 2nd order
If you lose the 1st order, the corresponding loss will be $15.
In the 2nd order, you will trade with an amount of $150. The stop-loss is 22.5$ and the take-profit is $45.
If you win, your profit will be $45 for the 2nd order. At this point, your total profit will be $30 (minus the loss of $15 of the 1st order).
Case 3: Lose the 1st and 2nd orders but win the 3rd order
The total loss for both losing orders (1st order + 2nd order) will be: $15 + $22.5 = $37.5.
In the 3rd order, you will trade with an amount of $220. The stop-loss will be $33 and the take-profit will be $66.
If you win, you will have a total profit of $28.5 (Minus the total loss of the 1st and 2nd orders). The profit ratio is still 10%.
But if you lose, your total loss for all 3 orders (1 + 2 + 3) will be $70.5. This corresponds to 23% of the total capital. So you still have $229 in your Olymp Trade account.
Unlike Fixed Time, if you trade Forex in Olymp Trade and lose 3 consecutive orders, you should review your own trading methods and strategies.
Forex is not like Fixed Time Trade. You are not under the pressure of expiration time. And all you need to do is determine the main trend of the market, then open orders following that trend. Regarding all these things, I have written very carefully in these 3 articles, you can read it again:
How to trade in Olymp Trade Forex using Retest points
Now you know how to use Martingale strategy to trade Forex. I will guide you in detail how to open orders, how to place stop-loss and take-profit in Olymp Trade.
Requirements:
- Focus on trading with the EUR/USD currency pair. The leverage is limited to x200.
- Use the Japanese 30-minute candlestick chart.
- The Forex trading strategy will be the Support/Resistance and Retest. If you do not know how to trade like this, please read this article: What is Retest? Why is it so magical in technical analysis?
How to trade Forex:
Open an UP order when: The price breaks out of the resistance level and goes up. It then retests the resistance zone just passed. The stop-loss is 15% and the take-profit is 30%.
Open a DOWN order when: The price breaks out of the support zone and goes down. It then retests the support zone just passed. Remember to set a stop-loss and a take-profit.
After placing an order, you can turn off the screen and do nothing.
Remember the total number of orders you are allowed to trade over the total capital of $300: If you lose the 1st with $100, you can open the 2nd order at $150. If you continue to lose, then you can open 3rd order at $220. But if you win an order, please stop.
One last word
Why don’t you think of Olymp Trade Forex? Maybe this is not a place for you to make money fast. But if you trade Forex, your account will be more secure.
And so is Martingale strategy in Forex trading. Never lose all the money you’ve deposited into your account. Remember: Opportunity is only for those who have money.
That’s all! Hopefully, this article will give you another perspective on Olymp Trade. We do not have Fixed Time only, we also have Forex.
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The post How Did I Lose Money Because Of Martingale Strategy In Olymp Trade? appeared first on How To Trade Blog.
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