Martingale
A position-sizing strategy where the trader doubles the size after every loss — banned on virtually every prop firm account.
Definition
Martingale is a strategy where the trader doubles their position size after each losing trade, with the goal of recovering all previous losses plus a small profit the moment a single trade wins. Starting with a $100 position: lose, next trade is $200. Lose again: $400. Then $800, $1,600, $3,200. Mathematically, a single win at any level recovers all prior losses. In practice, accounts blow up when the required position size exceeds what the remaining balance or drawdown limit can support.
Example
Why It Matters
Martingale is banned on virtually every prop firm because its blowup failure mode is catastrophic and predictable. Firms detect it via position-size progression — trades in sequence sized 1x, 2x, 4x, 8x are auto-flagged even without a human reviewing the account. The rule is usually worded loosely ('no progressive position sizing after losses') to catch variants like anti-martingale grids, cost-averaging after losses, and any size-doubling logic. Many traders who get caught by this rule were not running pure martingale — they were adding to losers, which reads the same to the firm's detection system.