Question
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What are the cons of martingale?
17 Answers
<p id="isPasted">This is a Martingale strategy. Let's take the sequence on a bit.</p><p>Bet $8 on black. Lose the $8.</p><p>Bet $16 on black. Lose the $16.</p><p>Bet $32 on black. Lose the $32.</p><p>Bet $64 on black. Lose the $64.</p><p>Bet $128 on black.</p><p>"Excuse me sir, you can't do that - the table limit is $100." You're $127 down, and no way to recover it. And seven reds or greens in a row isn't rare - you can expect it to show up about one time in 90.</p>
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<p><br>It lacks a basic understanding of casino games and probability. In double-zero roulette, there are 38 places the ball can land (1-36, 0, and 00). Therefore, there is a 2/38 (1/14) chance that neither black nor red will hit. The style of betting you suggest is called "progressive on the downside". This means that you risk more and more until you win. The fundamental rule of thumb in gambling is that the more you bet, the more the casino makes. It may not seem like much, but the 1/14 chance is significant as you keep doubling your bet.</p>
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<p><br>The short answer is “It doesn’t work.” If a game pays twice the stake for a win, the martingale system is to double the bet after each loss. When you finally win you will get back all your outlay plus $1. Then start again. So you will keep making $1 as long as you play. The probability of a win sometime is 1, so in theory you should keep earning $1. In Monte-Carlo roulette (never play in Las Vegas where the house takes twice as much) you will win on average $1 every 37/18 plays.</p>
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<p><br>The Martingale betting strategy in any game of chance where you choose how much to bet (and when you win, you win equal to what you bet) refers to the approach of making a bet, then doubling that bet each time you lose, then returning to your original bet amount (or stopping) following a win. While most of the time a “run” of this strategy will end with you up ahead by one bet (since you are betting one bet more than your total losses in the run with every new bet), it does not always work and is not …</p>
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<p id="isPasted">Cons of the Martingale Strategy:</p><ul style="list-style-type: disc;margin-left:26px;"><li>Within a few transactions, the amount spent on trading can reach huge proportions.</li><li>The trader can suffer devastating losses if he runs out of funds and exits the trade while using the strategy.</li><li>There is a possibility that the stocks will stop trading at some point.</li><li>Martingale Strategy has an unreasonably high risk-to-reward ratio. When using the strategy, higher amounts are spent with each loss until the last win, and the final profit is only equal to the initial bet.</li><li>All transaction costs are ignored.</li><li>Some exchanges limit the size of trades. Because of this, …</li></ul>
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