Glossary

Martingale

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Martingale doubles (or otherwise escalates) size after each loss, so the eventual win recovers everything plus a small profit. The equity curve it produces looks eerily smooth — until a streak arrives that the account cannot double through.

Variants (grid trading, "recovery zones", partial martingale) soften the escalation but keep the shape: many small wins funded by rare, potentially catastrophic losses. Recognizing this shape in a track record is a core skill of EA evaluation.

Covered in depth in Lesson 10: Martingale: Die sanftesten Kurven verbergen die größten Bomben.

Related terms

• Drawdown — The decline from an account's peak value to its subsequent low — the number that measures how painful a strategy is to hold.
• Equity curve — The plot of account value over time — including open positions — that shows a strategy's character at a glance.
• Win rate — The percentage of trades that close in profit — meaningless on its own, informative next to the reward-to-risk ratio.