Martingale Strategy

A Martingale strategy doubles the position size after every losing trade, on the logic that a single eventual win will recover all prior losses plus a profit equal to the original stake. It's a mathematically dangerous approach in a leveraged, margin-based market, since a losing streak grows the required position size exponentially and can exhaust available margin or breach an account's risk limits before the "recovery" win ever comes. Martingale-based systems are widely flagged as a risk-management red flag by brokers and prop firms precisely because a long-enough losing streak — which will eventually happen — makes ruin close to inevitable.