What is martingale strategy?

The Martingale Strategy is a strategy of investing or betting introduced by French mathematician Paul Pierre Levy. It is considered a risky method of investing. It is based on the theory of increasing the amount allocated for investments, even if its value is falling, in expectation of a future increase.

What is the anti-martingale strategy?

Opposite of the traditional Martingale system, the anti-Martingale strategy involves doubling up on winning bets and reducing losing bets by half. It essentially a strategy that promotes a "hot hand" mentality when on a winning streak and a stop-loss strategy when there is a losing streak.

What is the risk-to-reward ratio of the martingale strategy?

The risk-to-reward ratio of the Martingale Strategy is not reasonable. While using the strategy, higher amounts are spent with every loss until a win, and the final profit is only equal to the initial bet size. The strategy ignores transaction costs associated with every trade. There are limits placed by exchanges on trade size.

What is a martingale betting system?

The martingale strategy has also been applied to roulette, as the probability of hitting either red or black is close to 50%. The fundamental reason why all martingale-type betting systems fail is that no amount of information about the results of past bets can be used to predict the results of a future bet with accuracy better than chance.