Stake strategiesUpdated 2 min readBy the FXNOD team
Reverse Martingale (Paroli): raising the stake after wins
Reverse Martingale, also called anti-Martingale or Paroli, increases the stake after a win and returns to the base stake after a loss. It risks only the base stake plus winnings, so losing streaks are cheap. In exchange it wins rarely: a cycle pays only when several wins come in a row. The average result is unchanged.
A three-step cycle
| Result so far | Next stake | Net position |
|---|---|---|
| Start | 1 | 0 |
| Win | 2 | +1 |
| Win, win | 4 | +3 |
| Win, win, win | Stop and reset to 1 | +7 |
| Any loss before the third win | Reset to 1 | -1 |
At even money, three wins in a row turn a stake of 1 into a profit of 7. Any loss along the way costs only the original 1, because the larger stakes were made of winnings.
The arithmetic
On 50% trades, three wins in a row happen one time in eight. Seven cycles lose 1 each and one cycle wins 7: zero on average, before the contract's cost. It is the mirror image of Martingale: many small losses and an occasional large win, where Martingale gives many small wins and an occasional large loss.
Compared with Martingale
| Martingale | Reverse Martingale | |
|---|---|---|
| Stake rises after | A loss | A win |
| Most a cycle can lose | The whole ladder | The base stake |
| Typical session | Smooth gains, then a crash | Slow bleed, then a jump |
| Psychological cost | Very high at the end | Constant small frustration |
| Expected result | Unchanged | Unchanged |
Choosing the cycle length
- Two wins: pays 3 one time in four.
- Three wins: pays 7 one time in eight.
- Four wins: pays 15 one time in sixteen.
- Longer cycles pay more and complete more rarely. Decide the length before you start and always reset when it is reached.
Why some traders prefer it
The worst case is known and small. A bad session is a string of base-stake losses, which a stop loss handles cleanly. That makes it far easier to live with than a recovery system, even though neither improves the odds.
In Bot Forge
Reverse Martingale is one of the stake settings in Bot Forge. An escalated stake holds at your ceiling instead of ending the run, and the session stop loss and profit target apply as usual.
Questions people ask
- Is reverse Martingale safer than Martingale?
- Its worst case is far smaller, because it only risks the base stake and winnings. It is not more profitable on average.
- What is the Paroli system?
- A reverse Martingale with a fixed cycle, usually three wins, after which the stake resets to the base.
- Does it work on trending markets?
- It benefits from streaks of wins. Whether a market will produce them is the part no staking system can provide.
See the stakes before you start
Bot Forge shows the stakes of a losing streak before a bot runs, will not start without a stop loss, and caps the largest stake. Try any stake setting on your Deriv demo account.
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