What is the Anti-Martingale System?
How Does the Anti-Martingale System Work?
The anti-Martingale system is based on the idea of increasing the amount of money allocated in a portfolio to the stocks that are showing the most gains. This model is risky because investors are over-weighting their portfolio with securities that have already risen sharply.
To illustrate an anti-Martingale system, suppose a portfolio contains 10 shares of XYZ stock purchased at $100 each ($1,000 total value). Say that XYZ stock then rises from $100 to $200. The anti-martingale system would call for the portfolio manager to purchase 10 additional XYZ shares for $200.
The anti-Martingale system should not be confused with the Martingale system, which purchases securities that are decreasing in price, not increasing in price.