The Martingale System is a high-risk strategy where you double your bet after every loss, aiming to recover all previous losses plus a small profit with a single win. For example, if you lose $10 on a trade, your next trade would be for $20, then $40 if you lose again, and so on. The Martingale System, originating from gambling, applies a progressively increasing bet size after each losing trade. The underlying premise is that a losing streak cannot last indefinitely, and eventually, a winning trade will occur, recouping all prior losses and securing a small profit equal to the initial bet size. For instance, a trader using Martingale on a binary option with a 50% payout might start with a $10 trade. If it loses, the next trade is $20. If that also loses, the next is $40, then $80, $160, and so on. The danger becomes apparent quickly: a string of just 5-6 consecutive losses can necessitate an incredibly large trade size, potentially exceeding available capital or the market's liquidity, leading to a complete wipeout of the trading account. This strategy fundamentally contradicts sound risk management principles by escalating risk when performance is weakest.