Martingale is a high-risk trading approach where a trader increases their risk exposure with the aim of recovering previous positions.
We identify two forms of martingale violations:
1)Increasing Risk After a Loss
2)Anti-Scaling
1. Increasing Risk After a Loss
How We Calculate Risk
We measure risk using both lot size and pip distance to stop loss, not lot size alone.
Risk % = ((SL Distance × Lot Size × Contract Size) / Initial Account Balance) × 100
Where SL Distance = |Entry Price − Stop Loss Price|
ps: If a trade has no stop loss set, the realized loss on that position is used as its risk, since there is no predefined pip distance to measure against.
The Rule
After a losing trade, if the next trade carries significantly higher risk than the loss that preceded it, this is classified as the Increasing Risk After a Loss rule. "Significant" means an increase of at least 1.5x, or ideally a doubling of risk.
We refer to efficient risk management So This is assessed based on the pattern itself (behaviour), regardless of the instrument, direction, or the time between two Trades, or intent behind the next trade. Some traders apply this pattern unintentionally as part of their normal trading; it is still flagged, because in any case, the trader is trading with increased risk.
PS: This applies only to positions risked above 0.1%. Any losses under 0.1% will not be considered for 'Increasing Risk After a Loss' assessment, as small market movements and spreads can significantly distort the calculated risk on smaller positions.
Example: A trader risks 1.5% on a XAUUSD trade, which results in a loss. Instead of maintaining consistent risk, the trader risks 3.00% on the next trade. This is classified as martingale.
2. Anti-Scaling
Anti-scaling occurs when a trader already has an open position on a specific instrument and direction, and opens an additional trade in the same instrument and direction while the first is still running at a loss. This compounds total exposure on that instrument.
Traders are fully permitted to:
Scale into winning positions without restriction
Trade different instruments, even while another position is running at a loss
Example: A trader opens a BUY position on XAUUSD, which moves against them and is running at a loss. Instead of waiting for it to resolve, they open another BUY position on XAUUSD while the first is still at a loss. This is classified as anti-scaling, regardless of the lot size used on the second entry.
Why These Strategies Are Prohibited
Escalating Risk: Both patterns expose traders to exponentially increasing risk, which can rapidly deplete an account during a losing sequence.
Unsustainable Risk Management: These approaches conflict with the responsible, sustainable trading our platform is built on.
What Happens If My Account Is Flagged?
If our risk team identifies a flagged martingale or anti-scaling pattern, we will contact you during the account review before making any decisions. We will share the specific flagged trades, explain why they were flagged, and give you an opportunity to provide clarification.
We believe in transparency and giving every trader a fair opportunity to explain their approach. Once a consistent pattern is confirmed, our decision is based on the trade data and the definitions outlined in this article.