THIS Trading Strategy is a LIE... I took 100,000 TRADES with the Martingale Strategy

Can you make money with the Martingale Trading Strategy? I mean this strategy has 100% chance of success on paper, so can you make money with it as well? In this video, I took more than 100000 virtual trades so you can know the truth about the Martingale Trading Strategy. Martingale Strategy dates back to the 18 century, and many places especially in Las Vegas have banned it, because the probability of making money with it is 100% if your pockets are deep enough that is. The idea is pretty simple, when you lose money, double the trade amount, and keep doubling until you have a winner. If your risk on a trade is 100 dollars, you will make 100 dollars if your trade wins with a 1 to 1 reward risk ratio. But if you lose the first trade, you multiply your previous risk by 2 times. So when you win, you will recover the loss, and be in profit by one trade. But does that really work? Sure people used to use it before, and managed to make money where their probability of winning was not great. But can you make money with it in forex or stock market, where your probability of success is a lot better? On the Trading Rush Channel, we have tested many different trading strategies 100 times to see if they actually work or not. After testing, many strategies gave win rates around 55 percent even with a reward risk ratio of 1.5 to 1. Which means, that if you use a profitable trading strategy mentioned on the Trading Rush Channel, you should be able to make money. And if you use a 1 to 1 reward risk ratio instead of 1.5 to 1, you should easily get a win rate of more than 55 percent, or at least 55 percent.

Let’s say you have watched other videos on this channel and you have a trading strategy with a 55 percent win rate. For this experiment, let’s set the account size to 10000 dollars, and set our initial risk on trade to 100 dollars. In other words, we will risk 1 percent of the account on the first trade and the trade after a winner, but if we lose a trade, it’s a different story because the risk will be multiplied by 2 times. If you search martingale strategy graphs on google, you will find graphs like these, where total balance is going up with few downward spikes. In the end, it made money. So if we simulate trades with a 55 percent approximate win rate, we should also get a similar result right?

In the first attempt, I ran the simulation until it took the 1000th trade to see what happens. I will explain what the 100 red and green cubes are in a moment. But before that, look at the winners and losers and the balance graph. As you can see, the martingale strategy is making money even after 100 trades. And after 200 trades, the account size is more than doubled with a win rate of approximately 55 percent. If we fast forward a little bit, the martingale trading strategy has still not made a loss or blown up the account even after 500 trades. In the first attempt, the results were pretty interesting and can be shocking for some experienced traders, because after 1000 trades, the martingale trading strategy actually made a lot of money. The account size at the start was 10000, but after 1000 trades it’s around 66000. The profit graph also looks very similar and profitable to the one we saw on google. Does this mean the martingale strategy works? Well, not exactly, I will take 100000 trades in a few seconds. But before that, I want you to understand one thing. You see, a normal profitable trading strategy, lets say a strategy with 55 percent win rate, can give around 10 losing trades in a row, and sometimes even more. With a normal trading strategy, where risk on trade remains the same with every trade, you will only lose 10 percent of the entire account if you lose 10 trades in a row and if your risk was 1 percent per trade. But with the martingale trading strategy, if you lose multiple trades in a row, the risk on trade becomes a lot bigger than 1 percent. And at one point, martingale strategy will force you to put your entire account on the line.

The 100 red and green cubes you are seeing on your screen, are 100 different trading bots. Every single one of them has 10000 dollars to trade with, and all of them are using a strategy that has a 55 percent win rate. Furthermore, every single one of them is going to take 1000 unique trades with the martingale trading strategy. So in total, we are taking 100000 unique trades with the martingale strategy. Lets see if they make money or which one of them blows up their account.

Lets start, and within 10 trades ladies and gentlemen, one of the trading bots has blown up their account. We will see their balance graph in a moment. And soon after with just 12 trades, the second contestant is out of the game. Another bot gives up at the 15th trade. Looks like the red team forgot to get their Trading Rush Merch because they are losing left and right. There goes the first loser of the green team. With just 30 trades, 5 bots have blown up their 10000 dollars account. There are still more than 950 trades to go, so if we fast forward a bit, you will see contestants from both teams falling left and right. After 100 trades, 11 contestants have blown up their accounts, such a disappointment. After 500 trades, 31 bots are blaming their brokers for trading against them. And as we come closer to the 1000 trades mark, 43 have lost the game with the martingale strategy.

If we look at the balance graph of the bot that lost first, you will see that they managed to make money at the start, but their luck ended there because then they had 7 losing trades in a row. Here are some other balance graphs of the contestants that blew up their accounts. Now remember, their ending account balance is negative. This will happen if they have a broker that doesn’t have a negative balance protection. Now in today’s world, many brokers will close the positions when the account reaches zero even if you used a high margin to take the last trade. Here’s the balance graph of the contestant that lost near the end. This one is pretty interesting because this contestant managed to make more than 50000 in profit with a starting balance of only 10000. But after the 971th trade, they had 10 losing trades in a row, and because of the martingale strategy, they blew up their account on the 981th trade. This one is a good lesson, because it shows that you can make a lot of money with the martingale trading strategy in the forex and stock market, but in the end, there is still a chance of you blowing up the account. Martingale strategy works 100% of the time, but for that, you will need some real deep pockets. In this experiment, we were risking 1 percent of the total account as the initial risk. When the contestant had 10 losers in a row, it lost everything. But what if we had used a 0.1% of the total account balance as the initial risk. Well then you would have required a higher win rate strategy. Because a strategy with around 55 win rate and 0.1% initial risk can still blow up the account with the martingale strategy.

0.1% of 10000 is 10 dollars, imagine risking a $10000 account just to make 10 dollars. Why shouldn’t you use the martingale trading strategy in the forex and stock market? I think you can answer that question by yourself now.