Please contact us if you are interested in trading Binary Options, and we will guide you every step of the way.

Some people say markets are random, inefficient and unpredictable. In recent years we see forex expert advisors which enter trades randomly, depending only on money management and trade management to generate returns. The case is even stronger for binary options, where the criteria and payout for wins and losses are clearly defined.

In binary option trading, you either win or lose, the payout is defined for you, typically within 70% – 85%, and the loss is 100% on losing trades. Naturally, a Martingale money management system comes to mind.

Is Martingale Trading Dangerous?

Yes, because you are basically increasing your trade size to make up for the summation of previous losses. No, if you have unlimited capital. Since most of us have limited capital, it is wise to start with really small trade sizes if you are using this system. In our binary option trading example below, we will start with a trade size of $5.

What Martingale Multiplier to use for Binary Option Trading?

This depends on the payout on winning trades. In scenario 1 below, the payout is 70% on winning trades, while this is 85% in scenario 2.

Let’s assume you hit a losing streak of 10 trades and need the 11th trade to recover ALL the previous 10 losses. With a payout of 70%, you need a martingale multiplier of 2.5 times, meaning each losing trade should be followed by a subsequent trade 2.5 times larger. The $33,379 made on the 11th trade will cover the prior losses of $31,786.

In Scenario 2, notice the martingale multiplier required is smaller because the payout is higher. At a 85% payout ratio, you require just 2.2 x multiplier on consecutive losing trades, and the $11,288 win on the 11th trade will make up prior losses of $11,062.

How to Trade Martingale Safely with Binary Options?

Forgive the oxymoron! Well, nothing is safe if you are exposing your capital for potential returns, but we can definitely lower risks.

1. Select trades with higher payouts, this will lower your multiplier requirement.

2. Start really small, for example $1 or $5. This is a balance: the lower your starting trade size, the lower your returns. The larger your starting trade size, the more capital you require.

3. Increase your win ratio so you shorten your losing streaks.

Contact us if you are interested in Trading Binary Options on MT4

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