Reverse Martingale Strategy - MT4/MT5 Resources
Hello everyone!
I recently learned this strategy and it's pretty incredible so I thought I'd share it with you and see what you think? We all know and have heard over and over again that we must always have more points in our TP than in our SP. The reverse martingale strategy is used to use our profits to double our bet in a specific direction. This way we can make huge profits without violating our risk management rules. For example, let's say we identify a bull market and the price has the potential to rise by 300 points.
Trade #1: Buy 0.01 lots of EURUSD @ 1.1200 SP: 1.1150 Target price: 1.1300 Risk: 50 pips Potential profit: 100 pips
Trade #2: Buy 0.02 lots of EURUSD @ 1.1300 SP: 1.1250 Target price: 1.1400 Risk: 50 pips Potential profit: 100 pips
Trade #3: Buy 0.04 lots of EURUSD @ 1.1400 SP: 1.1350 Target price: 1.1500 Risk: 50 pips Potential profit: 100 pips
Once the first trade is executed, we will make a profit of 100 pips on 0.01 lot, equivalent to 10.00 USD. At this point we are only risking 50 pips, which is equivalent to $5.00. Now we risk this profit and this time we buy 0.02 lots again. Once we hit the second price target we made $20.00, then we risked $20.00 and this time we bought 0.04 lots and we made another $40.00!
Now, if the first trade goes wrong, we only lose $5.00. If the second trade goes wrong, we lose nothing, if the third trade goes wrong, we still make $10.00, but if all three trades go as we predicted, we make a massive profit of $70.00!
I recently learned this strategy and it's pretty incredible so I thought I'd share it with you and see what you think? We all know and have heard over and over again that we must always have more points in our TP than in our SP. The reverse martingale strategy is used to use our profits to double our bet in a specific direction. This way we can make huge profits without violating our risk management rules. For example, let's say we identify a bull market and the price has the potential to rise by 300 points.
Trade #1: Buy 0.01 lots of EURUSD @ 1.1200 SP: 1.1150 Target price: 1.1300 Risk: 50 pips Potential profit: 100 pips
Trade #2: Buy 0.02 lots of EURUSD @ 1.1300 SP: 1.1250 Target price: 1.1400 Risk: 50 pips Potential profit: 100 pips
Trade #3: Buy 0.04 lots of EURUSD @ 1.1400 SP: 1.1350 Target price: 1.1500 Risk: 50 pips Potential profit: 100 pips
Once the first trade is executed, we will make a profit of 100 pips on 0.01 lot, equivalent to 10.00 USD. At this point we are only risking 50 pips, which is equivalent to $5.00. Now we risk this profit and this time we buy 0.02 lots again. Once we hit the second price target we made $20.00, then we risked $20.00 and this time we bought 0.04 lots and we made another $40.00!
Now, if the first trade goes wrong, we only lose $5.00. If the second trade goes wrong, we lose nothing, if the third trade goes wrong, we still make $10.00, but if all three trades go as we predicted, we make a massive profit of $70.00!
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