- What is Martingale strategy?
The martingale strategy was first used in some speculative games, such as guessing big or small. This strategy is very simple, it means that in a game of guessing big or small, keep guessing only one side (only big or only small), and every time you lose, multiply the number of money lost by twice and keep guessing until you win once, you can win back all the money lost and earn an extra amount of the first investment.
According to probability theory, the probability of getting the first bet wrong is 50%, and the winning rate of the Martingale strategy is 50%, and so on, as follows.
Number of consecutive errors Probability of consecutive errors Winning rate of Martingale's strategy
- How does BigONE's Martingale strategy work?
The main logic of the BigONE Martingale strategy is to automatically buy in tranches and sell at once to take profit. Each buy uses double the amount of money to dilute the average cost of the position. When tokens are bought in unequal amounts after every fixed percentage/value drop in token price, each drop is followed by a series of 1, 2, 4, 8, 16, 32 ...... to buy the corresponding amount of tokens.
Let's assume that we open a position at 1 BTC = 20,000 USDT, and the price drops by 1% every time we cover the position, the price, quantity, amount, cost of holding the position, and the rate of increase of unsettling each time we cover the position are listed in the table below. When the position is filled 5 times, the position is equal to 95.97% of the initial price, then the coin price will rise by 0.92% to return the capital, and the profit will be made when the increase is greater than 0.92%, which greatly reduces the risk.* average price of position = buy amount / total number of units bought
* Unstacking increase = (cost of position - current price)/current price
Number of transactions Current Price Number of buys Buy Amount Position Cost Unstacking Increase Create Position
What are the advantages of the Martingale strategy?
1) By multiplying the bottom, you can quickly reduce the cost of holding a position, especially in the above table to fill a position, up more than 0.35%, you can make money profit easily.
2) As long as you have enough capital, theoretically you will win every bets.
3) Considerable gains in the medium and long-term shock market.
4) Not afraid of being trapped, suitable for bottoming out in bear markets.
What are the disadvantages of the Martingale strategy?
1) In reality, no one has an infinite amount of money, so even if the probability of a wrong bet happening in a row is 0.01%, there is still a possibility of losing money. Especially in digital currency investments, if the token price keeps falling and no longer rises or even goes to zero, then the theoretical effect is not achieved.
2) Poor returns in unilateral market.
If the token price is still falling after reaching the maximum number of position increases, how does the strategy work at this point?
At this point the strategy doesn't stop, it just doesn't continue to add positions to buy anymore. Wait until the price retraces to a profitable position and sell directly.
Explanation of the term
How much to add (by percentage): Every time the price of a token drops by a certain percentage, you start doubling your buy.
How much to add (by spread): For every fixed price drop in the price of the token, start doubling your buys.
How much to stop profit: In each round, when buying in batches and the price bounces back, stop profit and sell when you have earned a certain percentage to end the round of arbitrage.
Add position multiple: How many times the amount of the previous position is added, you can choose 1-2 times, support 1 decimal.
Maximum number of positions: The maximum number of positions that can be added when the coin price continues to fall, you can choose between 1-16 times.
Trading Signal: The trading timing for opening each round.
Immediate start: Start the next round immediately after the last round of arbitrage.
Delayed start: After the end of the previous round of take profit, the next round will be opened after a fixed time delay. Delayed start can be used to prevent losses caused by buying when pins are inserted upwards.
Trigger price: When the price drops to less than or equal to the specified price, then the buy run strategy will start.
Take profit by arbitrage count: Stop the strategy when it has been successfully arbitrated n times.
Stop profit by profit ratio: When the profit ratio reaches the preset ratio, withdraw all pending orders, sell all bought tokens at the same time and stop the strategy.
Stop Loss Ratio: When the actual loss ratio reaches the preset loss ratio, cancel all pending orders, sell all previously bought tokens and stop the strategy.
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