Martingale trading is a bulletproof strat
Only if you have an infinite line, infinite time, snd a random market. I.e. never. But it does form an important part of a balanced algo.
The martingale fallacy is based on the fact that the human brain is not easily fathoming the speed with which an exponential function increases. You have to use your left brain for that, which takes some thought work.
Edit: And you also have to understand the limit of your betting power, and the limit for bets in the casino.
Edit2: And to top it up: Your only gain in the end, if you win before the limits, is the size of your first bet. So if you start low, to be able to go on for a large number of rounds, your win is also low. If you start a martingale series with a one dollar bet, and lose many times, you could end up putting thousands on the table, and if you win in the end, your gain is one dollar, the size of the first bet.
A Martingale strategy works, so long as the win amount is equal to the bet and the odds are 50/50. With a 1 dollar bet, you are very likely to win your 1 back dollar bet back before you get anywhere near $1000. If the odds are 50/50, then you would have to lose 7 times in a row, to reach into the $100 arena... highly unlikely if the odds truly are 50/50.. the trick in that regard is making sure that you do NOT miscalculate the odds.
A Martingale strategy does NOT work. If you do the math, you will find you will lose money long-term unless you have infinite funds and no betting limits. Yes, it's unlikely that you will lose 10 times in a row or whatever, but when you do you are wiped out for an enormous amount of money, and it's that scenario which makes you lose money on the strategy long-term.
You have to keep doubling and betting until you win. It is mathematically proven at least to be a break even strategy as long as the odds are exactly 50/50 like flipping a coin or black and red on a roulette wheel... so long as there are NO betting limitations. Your point is that a guy would run out of money sooner or later, but overall it is at least a break even strategy... and pretty unlikely that a guy or gal would lose more than 10 times in a row.
You incorporated a 10 time betting limit into your description.. which is NOT part of the theory.. and pretty unlikely.. less than 1 in a 1,000 chance of losing 10 times in a row (actually it is a 1 in 1,024.00262 chance of losing that many times in a row)...
Anyhow, if we use the $1 scenario, the odds are that you would have won more than a thousand by the time you lose 10 in a row.... which if you lose 10 in a row, you are invested $1,023 at that point in time. If you lose one more time (11 times), then you are invested $2039, (1/2048.00524 chance). Anyhow.. sooner or later, you are going to win back your dollar, so long as you keep doubling your bet each time.. it's inevitable.. so long as the odds are 50/50.
Of course, if you do reach that unlucky losing streak of 10 in a row, then you gotta find the capital from somewhere to keep betting and doubling the bet again.. otherwise you will lock in your losses.
The problem, that I already mentioned, is that sometimes peeps will misunderstand or misread the odds or they will accept a betting limit or will deviate from the exact application of doubling the bet each time that you lose, until you win..
After you win, then you start over at $1 again.
Of course, if you were going to start out with $10 or $100, then you would need 10x or 100x more capital, in the event you entered a long losing streak... but it is almost guaranteed that you will NOT lose 10 times in a row, unless the odds really are NOT 50/50.
Well I am assuming you are talking about in a casino, since nobody in their right mind is going to let you keep doubling your bet on something until you win when the bet is break even. Martingales used in casinos lose just as much as any other strategy, but a lot quicker because you are often risking a lot more money per bet by the end of it. I said 10x because, starting at $1 (which most casinos won't even let you do), after about 8-10 losses you will hit the betting limit.
Assuming you are playing true 50-50's, with infinite bankroll and no betting limits, yes you will break even. But you will also break even betting $5 each time in that scenario, so why go bonkers with doubling your bet?
As for roulette, you DO realize that that is not a 50-50, right? The 0 (and sometimes 00) screw your odds and give the casino their edge on that bet. It has to be a TRUE 50-50 to break even, and if it's a true 50-50 (and even money bets as well), you will break even long term no matter what.
I have never employed it, and I do NOT usually play games of chance (or gamble in that kind of direction) but I suppose that you would do better with a martingales strategy b/c you would cash out, long before you hit those odd ball long negative streak scenarios. .. but yes, you are correct that no one (or casino) is going to let you double from $1 to $500 at one table.. just so you can win back your initial investment... but some online gambling sites may be more permissive.
I don't really know too much about this, except posters here are claiming to employ such strategies or variants of such. Anyhow, if you have to play 1000 times before you hit the 10 losses in a row scenario, then on other days, you are going to be taking home dough, no? You may be correct in the end, though that there are some better strategies that can be employed to ensure winning with less risk or effort.
