Dictionary Definition

What is Martingale System? According to several dictionaries, Martingale System conveys money management investing system in which the dollar values of investments continually increase after losses, or the position size increases with lowering portfolio size. This is a very risky method of investing. The main idea behind the Martingale system is that statistically you cannot lose all the time, and therefore you should increase the amount allocated in investments, even if they are declining in value in anticipation of a future increase. The Martingale system is commonly compared to betting in a casino. When a gambler using this method loses, he doubles his bet. By repeatedly doubling the bet, the gambler will eventually even out with a win in theory. Of course, this is assuming the gambler has an unlimited supply of money to bet with.

General Description of the System

This is the most well known and simple of all gambling systems. The Martingale system can be used on a wide range of casino games, but is mainly used regarding evens money betting on the roulette table. It is known as a progressive system because the amount a player stakes increases after losses. In very simple terms stakes are double after losses until a win occurs. You start with one bet. If you win, you start again with one bet. If you lose, you double your bet. Each time you lose, you double your last lost bet. Eventually you are bound to win. When you win you would recover all your lost bets plus one unit or chip profit against your initial wager. That final winning bet after a string of loses will replace all the previous lost money plus give you a profit equal to your original bet. It does not matter how many losing bets occurred as long as you double each bet after a loss eventually you must win. This seems like a foolproof system not to lose any money, but as with all progressive systems, the player must proceed with caution. A players bankroll may disappear in a very short time by doubling their stake every time they lose, also mathematical law states that the past has no effect upon the future in an evens money chance e.g. if the roulette wheel has spun ten blacks in a row, it still has the same chance of coming up black as it does red in the next spin. This system is best used in Roulette, but can also be used in Blackjack.

Important Points

What is important is that the bet size quickly increases during a string of losses. For those of us without a Bill Gates size bank roll, you can be bankrupt before being rescued by a winning bet. Even if you do have a huge bank roll, casinos have a limit on the size of bets in order to prevent heavily capitalized gamblers from using this strategy. The problem with the Martingale systems is that after a run of losses, the bet size begins to get enormous. Although infallible in theory, the Martingale system requires a large bankroll, has a very low return and is a very risky one because of the maximum bet limits imposed by the casinos. If you run out of money or reach the house limit, you can lose a lot with no chance to recover your losses. This system will work with certainty if the trader has a large amount of capital and time. No matter how great the string of losses, there will eventually be a winning trade which will recoup the losses. This system can only be recommended by those with unlimited wealth and time. For the rest of us, Martingale systems are a way to financial disaster.

Recommendations :

Should you use the Martingale System? That is a question only you can answer, but use some ideas to help you decide. The Martingale may be for you if:

• You are willing to lose a larger amount of money than normally, if you do lose.
• You have at least a 200 dollars bankroll if you are making one dollar bets, or a 1000 dollars bankroll if you are making five dollars bets.
• You are only going to play for few hours.

The Martingale System is not for you if:

• You only skimmed this page and you think the Martingale will make you a guaranteed winner.
• You do not have at least 200 dollars for one dollar bets or 1000 dollars for five dollars bets.
• You are planning on playing for long periods of time, especially if you plan on playing American roulette.