Martingale System

A money management system of investing in which the dollar values of investments continually increase after losses, or the position size increases with lowering portfolio size.

This is a very risky method of investing. The main idea behind the Martingale system is that statistically you cannot lose all the time, and therefore you should increase the amount allocated in investments—even if they are declining in value—in anticipation of a future increase.

The Martingale system is commonly compared to betting in a casino. When a gambler using this method loses, he or she doubles his or her bet. By repeatedly doubling the bet when he or she loses, the gambler will (in theory) eventually even out with a win. Of course, this is assuming the gambler has an unlimited supply of money to bet with.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Anti-Martingale System — A system of position sizing that correlates the levels of investment with the risk and portfolio size. Contrary to the Martingale system, the anti Martingale accepts greater risks during periods of expansive growth, and an increasing dollar value …   Investment dictionary

  • Martingale (betting system) — For the generalised mathematical concept, see martingale (probability theory). Originally, martingale referred to a class of betting strategies popular in 18th century France. The simplest of these strategies was designed for a game in which the… …   Wikipedia

  • Martingale — can refer to: Martingale (probability theory), a stochastic process in which the conditional expectation of the next value, given the current and preceding values, is the current value Martingale (tack) for horses Martingale (collar) for dogs and …   Wikipedia

  • martingale — ► NOUN 1) a strap or set of straps running from the noseband or reins to the girth of a horse, used to prevent the horse from raising its head too high. 2) a gambling system that involves a continual doubling of the stakes. ORIGIN French, from an …   English terms dictionary

  • martingale — [mär′t ngal΄märt′ n gāl΄] n. [Fr, prob. < Sp almártaga, a check, rein < Ar] 1. the strap of a horse s harness passing from the noseband to the girth between the forelegs, to keep the horse from rearing or throwing back its head: see HARNESS …   English World dictionary

  • Martingale (probability theory) — For the martingale betting strategy , see martingale (betting system). Stopped Brownian motion is an example of a martingale. It can be used to model an even coin toss betting game with the possibility of bankruptcy. In probability theory, a… …   Wikipedia

  • martingale — /mahr tn gayl /, n. 1. Also called standing martingale. part of the tack or harness of a horse, consisting of a strap that fastens to the girth, passes between the forelegs and through a loop in the neckstrap or hame, and fastens to the noseband …   Universalium

  • martingale — [ mα:tɪŋgeɪl] noun 1》 a strap or set of straps running from the noseband or reins to the girth of a horse, used to prevent the horse from raising its head too high. 2》 a gambling system that involves a continual doubling of the stakes. Origin C16 …   English new terms dictionary

  • martingale — mar•tin•gale [[t]ˈmɑr tnˌgeɪl[/t]] n. 1) dch part of the tack or harness of a horse, consisting of a strap that fastens to the girth, passes between the forelegs, and fastens to the noseband or reins: used to steady the horse s head 2) naut. a… …   From formal English to slang

  • martingale — /ˈmatəngeɪl/ (say mahtuhngayl) noun 1. a strap of a horse s harness passing from the bit or headgear, between the forelegs, to the girth, for holding the head down. 2. Nautical a short, perpendicular spar under the bowsprit end, used for staying… …   Australian English dictionary

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