How Grid differs from Martingale
Both strategies add positions against the price move. The difference is the volume of the added positions — and it changes everything.
Volume
- Grid (pure form): every new position has the same volume. After n levels total volume = n × lot.
- Martingale: each new position's volume is multiplied by a factor (classically ×2). After n levels total volume = lot × (2ⁿ − 1).
Example (illustration)
| Levels | Grid, 0.01 × n | Martingale ×2 |
|---|---|---|
| 1 | 0.01 | 0.01 |
| 5 | 0.05 | 0.31 |
| 8 | 0.08 | 2.55 |
| 10 | 0.10 | 10.23 |
At ten levels a martingale carries a hundred times the volume of a grid. Its break-even point is closer to the current price — so it is "rescued" by a small pullback more often, but its margin requirements grow exponentially.
The practical difference
- A martingale closes the basket faster after a pullback — a nice equity curve in most tests.
- But in a long move it reaches Stop Out in fewer levels, with a multiple of the loss at that moment.
- A constant-volume grid survives longer moves but recovers more slowly.
- Intermediate variants exist (a moderate multiplier, a cap on multiplications).
What to look at when evaluating
Maximum total basket volume, maximum equity drawdown and the distance to Stop Out in the worst historical move. A smooth martingale balance curve does not mean low risk.
The materials are for information only and are not investment advice. Leveraged trading carries a high risk of losing money.
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