Glossary

Martingale

Increasing position size after a loss so the next win recovers everything lost so far, plus a profit.

A martingale system doubles or otherwise scales up the size of a position after a loss. If the next trade wins, it clears every prior loss in the sequence and adds a small profit; if it loses too, the next size is larger still.

The approach turns a normal string of losses into one exponentially larger bet. It fails the moment a losing streak outlasts the deposit, which is a matter of when, not if, over a long enough history.