Can you make money trading Forex? Definitely Yes. You can make money trading Forex. However, you are responsible for the ‘How’ you will do it.
To make sure you understand my question, I will rephrase and enlarge it. “Can you make money trading Forex without following a particular trading strategy?”
Definitely yes. But mostly, it will be out of luck.
However, if you want to make real consistent profits then you should use trading strategies.
And now that you know you need a trading strategy to win consistently in Forex trading, which strategy are you using? Maybe none, maybe one of ours or several that you learned somewhere.
If none, then you are in the right place.
If one or more, then you are the luckiest person today because this post will not only add to the list of strategies you can use to make profits trading; but it will also enhance your knowledge of money management in Forex.
Introducing the Anti-Martingale Trading Strategy!
Sounds Familiar? Maybe because you have heard of the Martingale trading method before. And in that regard, the anti-martingale is its reverse.
Ready to learn this strategy too? Let’s dive right in.
What is the Anti-Martingale Trading Strategy?
The Anti-Martingale Trading Strategy is a money management trading method.
It involves halving the trade size each time you lose and doubling the trade size each time you win. This method is the complete opposite of the Martingale method of trading.
In the Martingale method, a trader doubles the trade size when they lose and halves it when they win.
Principle Behind the Anti-Martingale Trading Strategy.
The presumption of the anti-martingale method is that a trader can take advantage of a winning trade by doubling his trade size. Greater risks in periods of expansive growth are accepted by the strategy and it is considered better than martingale because it is less risky to increase trade size if you win than if you lose.
When the markets are trending down, the anti-martingale method may work so well for a trader who may take a series of negative trades before a loss interrupts his wins.
If he was to double down on a given win say the one before a loss, that would expose him to a single large loss that may wipe out the previous profits.
In a different scenario, cutting a losing trade into half, the trader is practicing stop-loss discipline which we know is a good thing to do in trading. It will be simply a way of saying, “Let your winners run but cut your losers early.”
Basically, instead of doubling your trade size after a loss as in the Martingale method, you double it after a win. Instead of halving your trade size after a win, you half it after a loss. The method may, therefore, be safer to your capital but with lower profitability.
Using the Anti-Martingale Trading Strategy to trade Forex.
Apply the Anti-Martingale trading strategy in forex trading in the following quick steps.
- Set the trade size of the first investment, say $10.
- Place a trade in the direction you think that the price will go in the next given period of time.
- At expiration, let us say you lose!!
- This time you will need to half your trade size to $5.
- Place a second trade in the direction you think the price will go in the next given period of time.
- At expiration, let us say you win!!
- This time you will need to double your trade size to $10.
- Place the third trade in the direction you think the price will go in the next given period of time.
- At expiration, let us assume you lost!!
- You know what to do next, right? You will need to half the trade size to $5.
- Place another trade in your preferred direction.
- At expiration you win!!
- You now know that you need to double your trade size to $10.
- Place a trade in your preferred direction.
- Guess what happens? You win again!!
- Double that trade size to $20 and place a trade.
- Surprisingly you won again!!
- You know what, double that investment amount to $40 and place a trade.
- To your shock you won that trade too!!
What do you think just happened to your account? Let us see from the table below assuming the profit was 80% on every win.
|Trade Size ($)||10||5||10||5||10||20||40|
The net impact on your account according to our findings up there is positive. That applies to when the trading conditions work exactly like ours. Market conditions may be better or worse for your case but be positive.
Let us say for example your account balance was $80 at the time you began trading. By the time you are done, according to our results, your account balance will shoot by $44 to $124!!
Note that this strategy will work towards profitability if you win most of the trades. However, if you lose most of the trades, it will only serve to conserve your capital.
Is your capital not that precious? Of course it is. It ensures you still have money to trade even after things go south.
Here is a method of trading that serves as a money management tool. Its major aim may not be profitability but to conserve that precious capital you hold so dearly. Conversely, the anti-martingale trading method may also be profitable if you win most of the trades.
Realize that the Anti-Martingale trading strategy is a way to improve the profitability of your already established trading strategy.
If you treat it as a magic wand, it may end you in a catastrophic state as far as your capital is concerned. Be careful even as you apply the strategy so that your account is not blown.