Why Does a Futures Martingale Bot Fail?
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I. Insufficient Balance
This is the most common and straightforward cause of Futures Martingale bot failure.
The core mechanism of the Martingale strategy is to double the position size after each loss. The margin required for the n-th order is calculated as:
Initial Margin *2^(n-1), which leads to exponential growth in capital requirements.
During prolonged market moves against your position, the bot may experience multiple consecutive losses or liquidations.
As the account balance shrinks after each loss, the margin required for the next order continues to double.
In most cases, after 5 to 8 consecutive orders, the remaining balance becomes insufficient to meet the minimum margin requirement for the next trade.
Once this sequence is broken, the system can no longer place the next doubled order, and the bot automatically stops running.
II. Violation of Price Limit Restrictions
To maintain market stability and prevent price manipulation in low-liquidity trading pairs, HTX enforces price limit rules. The aggressive averaging-down behavior of Martingale bots can easily trigger these restrictions.
When using market orders in highly volatile conditions, trades may execute at unfavorable prices due to slippage, which can accelerate losses.
1. Price Limits: During extreme one-sided market movements, the exchange may activate circuit breakers, preventing orders from being placed outside predefined price ranges. This can stop the Martingale bot from adding new positions at the intended price levels.
2. Rate Limiting: To prevent system overload and API abuse, HTX limits the number of orders that can be placed per second or per minute. During periods of high volatility, rapid Martingale bot order placement may cause the account to be temporarily restricted from trading.
3. Position Limits: HTX also sets a maximum allowable position size for each contract. As the Martingale bot keeps increasing its position size, it can eventually reach the position limit, which prevents the bot from adding additional margin or opening new trades.
III. Order Size Below Minimum Requirements
In a Futures Martingale bot, each order size or margin amount follows a mathematical formula: 2^n times the initial value.
However, HTX enforces a minimum order quantity for every futures contract.
Due to price fluctuations, the calculated doubled order size may not result in a valid tradable unit.
When an order is submitted, the system automatically adjusts it to the nearest allowable unit. For example, the order may be rounded to 0.0015 BTC because 0.00125 BTC is not permitted.
This can lead to two critical issues:
1. Mathematical Inaccuracy: If the order cannot be doubled exactly, the mathematical foundation of the strategy is weakened. This shifts the break-even point and affects the bot's ability to fully recover losses.
2. Execution Failure: In extreme cases—especially after significant balance depletion—the calculated next order size may fall below the exchange’s minimum requirement. When this happens, the system rejects the order, causing the bot to stop running.
IV. Order Cancellation by the Risk Control System
To protect the stability of the trading environment, HTX may cancel orders based on the platform's internal risk management rules.
As a Futures Martingale bot continues to increase its position size, the account’s risk ratio can rise rapidly. In response, the risk control system may automatically cancel pending orders or restrict new positions for the following reasons:
1. Self-Trade Prevention (STP): If an order price is too close to the current market price, the system may flag it as a potential self-trade (buying and selling within the same account) and cancel the order.
2. Prevention of Cascading Liquidations: During extreme market volatility, the exchange prioritizes overall system stability by managing high-risk accounts. Futures Martingale bots, which involve adding positions against market trends, are considered high-risk and may be temporarily restricted to help prevent a chain reaction of liquidations.
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