Why do martingale and grid strategies blow accounts?
A seller showed me an EA with a smooth equity curve that uses martingale. Why does everyone warn against it?
For education only. This is not financial advice. Trading carries a high risk of loss.
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1 Answer
Best answer
Martingale doubles the position after each loss, so one winning trade recovers everything. The problem is that losing streaks happen, and each step needs a larger size. The risk grows exponentially while your capital is limited. A grid adds more trades as price moves against you, which has the same effect.
The result looks great for months, with many small wins, and then one strong trend wipes out the account.
If you use these methods, you need a hard maximum number of steps, a total loss limit and a position size small enough to survive a long run against you. For most people it is safer to avoid them.
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