A martingale restriction is an evaluation rule prohibiting trading strategies that systematically increase position size after a losing trade — the defining characteristic of martingale-style approaches. Where this rule applies, a trader who doubles lot size after each loss to recover previous losses with a single winning trade is in violation, regardless of whether that trade ultimately profits.

The restriction targets the sizing behaviour itself, not the outcome. A martingale sequence that happens to recover before breaching the drawdown limit is still a rule violation in programs that prohibit the approach.

Why programs restrict martingale strategies

Martingale strategies produce frequent small wins punctuated by rare catastrophic losses. The catastrophic loss scenario — a losing streak long enough to push position sizes beyond the drawdown limit — is precisely the outcome evaluation programs are designed to gate. A martingale trader who wins most of the time may still breach the drawdown floor in a single adverse sequence, and the compounding position sizes amplify that breach dramatically.

From a program integrity perspective, martingale-passing accounts do not demonstrate that the trader can manage risk within defined limits — they demonstrate that the trader avoided a bad streak during the evaluation window. That is not the same thing, and programs that allow it cannot use evaluation pass rates as a meaningful signal.

What counts as martingale

The core characteristic is loss-triggered position size escalation. Variations include:

• Classic martingale: Double the lot size after each loss.
• Anti-martingale / reverse martingale: Increase size after wins — typically not restricted, as this is a standard pyramiding approach.
• Grid strategies with size escalation: Adding positions at fixed intervals with increasing lot sizes — often caught by martingale restrictions depending on their implementation.
• Recovery-mode sizing: Increasing position size on a new trade specifically to recover losses from the previous trade — functionally martingale regardless of label.

Strategies that increase position size based on account growth (not losses) — including standard position sizing recalculated from a larger equity base — are not martingale and are not affected by this restriction.

FundedProp’s position on martingale strategies publishes in the rulebook before any evaluation opens for purchase. For related rule mechanics, see hedging restriction, position sizing, and breach.

FundedProp provides simulated trading evaluations. All accounts are demo accounts; no real capital is traded by participants. This is not investment advice.