Martingale is a high-risk trading approach where a trader increases their risk exposure significantly following a losing trade, with the aim of recovering previous losses. While some traders apply this method unintentionally as part of their normal trading, it significantly increases the risk of substantial losses and is prohibited on our platform.
We identify two forms of martingale violations:
1. Increasing Risk After a Loss
After a losing trade, the next trade carries a significantly higher risk than the previous one. Risk is not measured by lot size alone, we calculate actual risk using both lot size and pip distance to stop loss.
Important: The same lot size does not equal the same risk across different trades or instruments. For example, a 1-lot position on XAUUSD with a wider stop loss carries significantly more risk than a 1-lot position with a tighter stop loss. Similarly, a 1-lot position on XAUUSD carries a completely different risk profile than a 1-lot position on NAS100 or DAX due to differences in contract size, pip value and volatility. Our system accounts for all of these factors when calculating risk.
Example: A trader risks 1.5% on a XAUUSD trade, but the trade results in a loss. Instead of maintaining consistent risk, the trader risks 3.00% on the next trade. This increase in risk following a loss is classified as martingale regardless of the instrument, direction or intent behind the next trade.
2. Anti-Scaling
Anti-scaling occurs when a trader already has an open position on a specific instrument and direction, and subsequently opens an additional trade in the same instrument and same direction while the initial trade is still running at a loss. This compounds the total exposure on that instrument, effectively increasing overall risk.
Traders are fully permitted to:
Scale into winning positions without any restrictions
Trade different instruments, even if another position is running at a loss
Example: A trader opens a BUY position on XAUUSD. The trade moves against them and is running at a loss. Instead of waiting for the trade to resolve, the trader opens another BUY position on XAUUSD while the first is still in a loss. This additional exposure in the same instrument and direction is classified as anti-scaling, regardless of the lot size used on the second entry.
Why These Strategies Are Prohibited
Escalating Risk: Both martingale and anti-scaling expose traders to exponentially increasing risk, which can rapidly deplete an account balance during a losing sequence.
Unsustainable Risk Management: These approaches are not aligned with the principles of responsible and sustainable trading that our platform is built on.
What Happens If My Account Is Flagged?
If our risk team identifies martingale or anti-scaling patterns on your account, we will reach out to you before making any decision. We will share the specific flagged trades, explain how each one meets our definition, and give you the opportunity to provide your perspective.
We believe in transparency and giving every trader a fair opportunity to explain their approach. However once a consistent pattern is confirmed, our decision is based purely on the trade data and the guidelines outlined in this article.