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Finance::GeniusTrader::MoneyManagement::Martingale

Introduction

The Martingale system is probably the oldest of betting systems, many other systems are based on the basic theory of the Martingale, and so to evaluate most systems you need a full understanding of the Martingale.

Concept

The Martingale is a progression system (i.e. you increase your bet after a losing spin) played on the even chance bets on a roulette table although it can be used on even chance bets on other games, and the basic idea is that if you bet on one of the even chance bets (e.g. Red) eventually it will hit. With this in mind, if you increase your bets after each losing spin so that you win back all your losses plus one unit you will always walk away a winner. In order to win all previous losses back plus one unit you simply need to double your bet each time:

e.g. If you lost four consecutive spins and then won on the fifth spin the outcome of each spin would be (-1) + (-2) + (-4) + (-8) + (+16) = +1

You would have placed a total of 31 units at the start of the fifth spin, and when red hit on the fifth spin you would pick up 32 units.

http://www.casino-help.com/systems/martingale.shtml http://roulette.casino.com/article.pl/aid=mathematical_systems_part_1