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Anti-Martingale strategy is a money management system based on increasing the trading volume in case of profit and decreasing the volume in case of loss. This strategy is the opposite of Martingale system, which implies increasing the trading volume if the position is losing. If a trader use a standard Anti-Martingale strategy, he or she should double the volume, but the number of steps varies. Both Forex beginners and professionals use this money management (MM) system widely.
Description of Anti-Martingale system
This money management approach implies that if you determines the entrance point correctly, you should increase the volume by opening new positions in the same direction as close previous profitable positions (See img. 1). You determines the level of closing on your own. The first increase of the volume should be done after the second profitable position. As a rule, a trader doubles the volume. Thus, the increase in the volume in a series of profitable trades gives a good chance to extend the deposit promptly. Upon that, it is important to take into account the amount of deposit, a step size and other indicators. In other words it is necessary to calculate the number of positions you can open at the same time. Therefore, it is not recommended to open more that three trades at once. You should calculate everything before you open a position.
Image 1. The increment of the volume in Anti-Martingale system
In case of loss, you decrease the volume to the initial level. This does not allow you to lose your money quickly if the prediction of the price movement was incorrect. It is important to understand that the volume increase cannot continue without end. Usually traders increase their volume in two or three times and then get back to the initial level. It helps to protect the deposit, because the trend cannot be constant and such a strategy allows minimizing loss in case of trend reversal.
Pros and cons of Anti-Martingale strategy
The main advantage of Anti-Martingale system is an opportunity to increase your deposit promptly with a few steps. This money management system underlies many trading strategies, for example trading with a fixed percentage, fixed position etc. If conditions are unfavorable, a trader faces the minimal risk, because does not increase the volume. Whereas a series of profitable positions gives a very good profit.
Though Anti-Martingale strategy has some disadvantages. For example, if the marker is flat this money management system does not let to earn, because profitable and loss positions will alternate. Therefore, it is necessary to calculate entrance points correctly in order not to let your positions become losing.
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