Anti-Martingale System

AAA

DEFINITION of 'Anti-Martingale System'

A system of position sizing that correlates the levels of investment with the risk and portfolio size. An anti-Martingale strategy involves halving your bets each time you lose a trade, and doubling them each time you win a trade.

INVESTOPEDIA EXPLAINS 'Anti-Martingale System'

The assumption of the anti-Martingale system is you can capitalize on a winning streak by doubling your position. In contrast, a Martingale strategy requires the trader to double his bet each time he loses, and hope to eventually recover those losses and make a profit with a favorable bet. The anti-Martingale system accepts greater risks during periods of expansive growth and is considered a better system for online traders, because it is less risky to increase trade size during a winning streak, than during a losing streak.

The anti-Martingale system, along with the Martingale system and speculation, is one of three basic ways for forex traders to bet on the market.



RELATED TERMS
  1. Aggressive Investment Strategy

    A portfolio management strategy that attempts to maximize returns ...
  2. Portfolio

    A grouping of financial assets such as stocks, bonds and cash ...
  3. Casino Finance

    A slang term for an investment strategy that is considered extremely ...
  4. Martingale System

    A money management system of investing in which the dollar values ...
  5. Forex - FX

    The market in which currencies are traded. The forex market is ...
  6. Position Sizing

    The dollar value being invested into a particular security by ...
RELATED FAQS
  1. How much of a diversified portfolio should be invested in the electronics sector?

    The electronics sector tracks closely with the broader market, making it a cyclical sector with average volatility. Electronics ... Read Full Answer >>
  2. What are some common questions an interviewer may ask during an interview for a position ...

    When interviewing for a job at an investment bank, a candidate is likely to answer questions about his career and education ... Read Full Answer >>
  3. What is the theory of asymmetric information in economics?

    The theory of asymmetric information was developed in the 1970s and 1980s as a plausible explanation for common phenomena ... Read Full Answer >>
  4. How does market risk differ from specific risk?

    Market risk and specific risk are two different forms of risk that affect assets. All investment assets can be separated ... Read Full Answer >>
  5. What is the average annual return for the S&P 500?

    According to historical records, the average annual return for the S&P 500 since its inception in 1928 through 2014 is ... Read Full Answer >>
  6. How is perpetuity used in the Dividend Discount Model?

    The basic dividend discount model (DDM) creates an estimate of the constant growth rate, in perpetuity, expected for dividends ... Read Full Answer >>
Related Articles
  1. Forex Education

    Forex Trading The Martingale Way

    Martingale's mechanics involve an initial bet; however, each time the bet becomes a loser, the wager is doubled such that, given enough time, one winning trade will make up all of the previous ...
  2. Investing Basics

    5 Tips For Diversifying Your Portfolio

    A diversified portfolio will protect you in a tough market. Get some solid tips here!
  3. Active Trading

    4 Ways To Predict Market Performance

    There is academic evidence supporting different market views. Learn how and why the market can be predicted.
  4. Forex Education

    Understanding Forex Risk Management

    There's risk in every trade you take, but as long as you can measure risk, you can manage it.
  5. Insurance

    The Dangers Of Over-Diversifying Your Portfolio

    If you diversify too much, you might not lose much, but you won't gain much either.
  6. Active Trading

    The Basics Of Bollinger Bands®

    This strategy has become one of the most useful tools for spotlighting extreme short-term price moves.
  7. Economics

    What Is Supply?

    Supply is the amount of goods a producer is willing to produce at a given price, and is one of the most basic concepts in economics.
  8. Economics

    Modified Internal Rate of Return (MIRR)

    Modified internal rate of return (MIRR) is a variant of the more traditional internal rate of return calculation.
  9. Fundamental Analysis

    Explaining Expected Return

    The expected return is a tool used to determine whether or not an investment has a positive or negative average net outcome.
  10. Economics

    Understanding the Fisher Effect

    The Fisher effect states that the real interest rate equals the nominal interest rate minus the expected inflation rate.

You May Also Like

Hot Definitions
  1. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  2. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  3. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  4. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  5. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center