Mystery and misery of the martingale betting system: why it will not make you rich

Summary:

  • The martingale strategy asymptotically implies infinite capital or infinitely divisible stake. In reality you have a limited capital and there is a lower (in casino also an upper) bound of the stake.
  • In a fair game (with 50/50 chance of profit and loss) the probability of profit after a series of losses is still 50% (because the outcomes of bets or trades are independent from each other).
  • Typically, if you win then your profits are moderate but if you lose, the losses are severe (you can lose your capital just after a small series of unlucky bets).
  • If you make pretty many bets, you might make a good profit but the probability to make profit at all decreases with the number of bets. Losses stays severe.

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Binary Options: you may earn in a short term but eventually you WILL lose

Summary: 

  • Gambling with binary options you either lose 100% or earn about 90% of your stake. The win lose/ratio of 90/100 = 0.9 is worse than by the European roulette (36/37 = 0.973) and even by American roulette (36/38 = 0.947).
  • A trade takes just a couple of minutes, which allows (and implicitly encourages) you to commit a lot of trades. Due to the law of large numbers and negative odds, the more you trade, the more you lose.
  • Don't trust numerous "success stories" in Internet. Virtually all of them are fake and they are just a marketing trick of brokers or those who earn with brokers' affiliate programs.

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We did it, letYourMoneyGrow is online!

Hurrah! we have completely rebuilt letYourMoneyGrow.com and starting it from scratch. At first as a high-quality investment and financial blog. Then are going to add a powerful and easy-to-use toolset for portfolio analytics and optimisation. Stay with us!

P.S.
Though it is just a coincidence, but the start date is 1st of September, which is known as Knowledge Day. An important part of our mission is to provide the retail investors with knowledge (rather than hope for easy and quick money). All you need is willingness to learn! Some numeracy is also advantageous, however, if you are not particularly good in math, don't worry. We will prepare a mini-crash course for you and the rest will be done by our portfolio toolset.