If the Martingale system is doomed to fail, then the Anti-Martingale should be destined to succeed! All we need is a strategy capable of bringing us winning trade streaks.
Introduction
Most of us have tried several money management methods on trading, casino or sports betting. Even without realizing it, we have somehow tried to manage our account balance in some special way, in order to maximize our profits.
Surprisingly, most of the times we have ended up without a penny in our pockets, but that’s life.. at least we learned something.
About Money Managment Methods
Some of us have tried to study and learn some of the most famous ways of managing our balance. Including me, as it is part of my job.
The Kelly Criterion will be always my favorite -and always implemented into most of my trading bots. But people are somehow obsessed with the Martingale system.
It’s been years since I have studied and learned about the famous Martingale money management method. Indeed this system seems to be unbeatable. But you need only one thing. An infinite amount of money (and you will also need a casino/broker to allow you to use it). And there is gonna be some time that you will need to risk a very high amount in order to earn just 1$, or whatever your initial stake is.
In the real world sooner or later you will have to risk all of your available balance.
Let’s make one thing clear:
There is no account management method/strategy that will help you win, if your stats are not good enough.
In trading terms, it means that you will have to create a strategy that is gonna win slightly (or more than slightly) more often than it loses.
For those who don’t know what Martingale is, let me give you a small example. It’s easier in casino terms, so we will bet in red and black numbers.
Everytime that we lose, we will double our stake. That means that when the color of our choice finally wins, we will earn all the money that we have staked until this point + our initial profit. Here is an example with numbers:
| Round | Sel. Color | Stake | Result | Profit |
|---|---|---|---|---|
| 1 | Red | 1 | (Black) Loss | -1 |
| 2 | Red | 2 | (Red) Win | 1 |
| 3 | Red | 1 | (Black) Loss | 0 |
| 4 | Red | 2 | (Black) Loss | -2 |
| 5 | Red | 4 | (Black) Loss | -6 |
| 6 | Red | 8 | (Black) Loss | -14 |
| 7 | Red | 16 | (Black) Loss | -30 |
| 8 | Red | 32 | (Black) Loss | -62 |
| 9 | Red | 64 | (Red) Win | 2 |
| 10 | Red | 1 | (Red) Win | 3 |
Some people are trying to guess the color of the next number, but everyone who understands simple math, also understands that the probability in every round is exactly the same.
The same can be applied in trading and if we want to keep it simple, we will say that we need a SL/TP ratio of 1:1 and double our lot size after every loss. But again the risk is the same. Even if you are very good at trading, at some point you may want to risk more money than you are allowed to, or you feel comfortable to risk.
The Anti-Martingale System.
The simple idea behind the Anti-Martingale money management method is to double your stake/lot size after a win, and keep the same amount after every loss.
If by using the Martingale you always win a small amount, but in a losing streak you may lose enough money, then in the Anti-Martingale you will always lose a small amount of your account balance, and when a winning streak of your choice is achieved, you can take your profits and start again. In other terms you change places with the broker or the casino.
Let’s see the above example by using the Anti-Martingale (and a few more lines):
| Round | Sel. Color | Stake | Result | Profit |
|---|---|---|---|---|
| 1 | Red | 1 | (Black) Loss | -1 |
| 2 | Red | 1 | (Red) Win | 0 |
| 3 | Red | 2 | (Black) Loss | -2 |
| 4 | Red | 1 | (Black) Loss | -3 |
| 5 | Red | 1 | (Black) Loss | -4 |
| 6 | Red | 1 | (Black) Loss | -5 |
| 7 | Red | 1 | (Black) Loss | -6 |
| 8 | Red | 1 | (Black) Loss | -7 |
| 9 | Red | 1 | (Red) Win | -6 |
| 10 | Red | 2 | (Red) Win | -4 |
| 11 | Red | 4 | (Red) Win | 0 |
| 12 | Red | 8 | (Red) Win | 8 |
| 13 | Red | 16 | (Red) Win | 32 |
| 14 | Red | 32 | (Red) Win | 64 |
As you can see, if we are able to succeed some times in a raw, we can achieve high profits, with our risk remaining very low. If we want to continue our streak, we should stake 64, 128, 256, 512, 1024 and so on.. But remember, you need to stop somewhere.
Examples using the Master Oscillators EA
Let’s now see some practical examples.
In this case we are gonna use the Master Oscillators EA (MT5). A trading robot and tool designed to give you absolute freedom to create your own strategy, without overwhelming you with too many inputs (ok ok it has many inputs but it could be worse). You can download the demo for free in order to play around and explore the Anti-Martingale system using the backtester.
With this tool you can select between the RSI, CCI or Stochastic oscillator for the basic signal, and use several filters such as MA filter, time and day filters, dynamic SL and Lot size and much more, but for this example we are gonna keep things very simple.
We are gonna use the CCI (Period 20 - typical price), SL and TP set to 1*ATR (a dynamic way to risk around one candlestick’s width), we are not gonna close at opposite signal, or after a MA cross, and we are not gonna use any other technique that is gonna change our 1:1 RR.
We are gonna enter the market when the price is reversing, so the selected levels are gonna be when crossing above -210 for buy and when crossing below 210 for sell.
We are using EURUSD H1. This is not the best possible set, but we want to test how the Anti-Martingale performs in a real, slightly profitable, strategy.
For the Anti-Martingale we just need to scroll at the corresponding field, enable it (true) and select the streak that if achieved, we will restart our stake.
First let's take a look at the results without using the Anti-Martingale. From the 1st of January of 2023 until the 9th of November 2023.
Initial balance (demo): $10,000
Lot size: 1% of our account balance
Model: Every tick based on real ticks
Profit: $2,329.46
Profit Factor: 1.66
Balance Drawdown Maximal: 6.95%
Let’s now enable the Anti-Martingale:
Profit: $10,201.41
Profit Factor: 2.21
Balance Drawdown Maximal: 9.13%
I noticed a good winning streak of 7 during May, so let’s try this month just from curiosity. (Note that in the previous example when we reached our 4 wins in a row, we restarted our lot size)
Profit: $12,139.32
Profit Factor: 11.02
Balance Drawdown Maximal: 4.01%
Conclusion
Of course, not every month can be the same, but it is up to you to create a very good and profitable strategy. The Anti-Martingale system can help you boost your account balance, while it keeps your risk very low.
Test well before using. Your broker's leverage plays a very important role when you keep raising your Lot size
I’m wishing you happy trading days and we will chat again soon,
Ioannis Xenos - xignalcoding.com
Master Oscillators link:https://www.mql5.com/en/market/product/101500?source=Site+Market+My+Products+Page#description
Disclaimer:
Trading involves risk and is not suitable for everyone. The past performance of this product does not guarantee future results. Use of Master Oscillators or the Anti-Martingale system is at your own risk. The creator is not responsible for any losses you may incur while using this tool.
