Anti-Martingale – is the money management system based on increasing of volume under profit and decreasing of volume under loss. Strategy is built on the basis of Martingale system but the terms are opposite (as it comes from the name),because Martingale method implies increase of volume under loss. As per standard Anti-Martingale system, volume increase is double, but number of steps may vary. This money management (MM) system gained recognition on the Forex market and is applied by both beginners and professionals.
Description of Anti-Martingale system
This money management approach implies that upon an accurate determining of entrance point and with closing of profitable positions, trader increases volume by opening new positions in the same direction (watch pic. 1) The level of closing is determined by trader on his own. As per this strategy, the first increment of volume must be done after the second profitable position rather than after the first one. As a rule, increment is double. Increase in volume in series of profitable trades gives a good chance to surge deposit promptly. Upon that, it is important to account for amount of deposit, step size and other components. To put it simple, it is necessary to calculate number of positions you can open at the same time to be covered with sufficient amount money. Therefore, it is not recommended to open more that three trades simultaneously and calculate everything prior to entering market.
Picture 1. Anti-Martingale system,volume increment
In case of loss, trader decreases volume to the initial level. If market direction was found inaccurately, volume decline won't allow quick loss of money. Also it is important to understand that volume increase cannot continue without an end. Usually, traders increase their volume in two or three times and then get back to the initial level. It is done for protection, because trend cannot be permanent and such tactics allows minimizing loss in case of reversal of tendency.
Pros and cons of Anti-Martingale system
Major advantage of Anti-Martingale system is its ability to increase deposit promptly under rather simple conditions. This MM system underlies many trading strategies for example trading with a fixed percentage, fixed position etc. Under unfavorable conditions, trader faces minimal risk, because does not increase volume. Whereas series of profitable positions gives a very good profit.
Though Anti-Martingale strategy has not only advantages. For example, under flat such MM system does not let to earn, because profitable and loss positions will rotate. Therefore, it is necessary to calculate entrance moments correctly so not to let loss cover the profit gained.