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The regular (Martingale) form of this technique is a simple double-or-quits proposition. Any time you lose you wager twice what you just lost and you keep doing this. Eventually (and the exact timing of “eventually” is the key ingredient) you will win and set your position back to zero.

If you win you don’t do anything special, just take your winnings and bet again. It’s purely a technique for recovering losses. Sounds almost plausible so far, doesn’t it?

For binary options (so called Grinding) it’s not quite so straightforward on account of the amounts won and lost being unequal. If you stand to lose say $100 but only gain $80 then you need to adjust the “doubling up” to account for this discrepancy.

You can have a little play on the Grinding Strategy calculator on the next page, but first, in time honored fashion, some math…

Let’s say you’re trading binary options that pay out 80%. So you put $100 on some index falling but it rises. Now, in order to win back what you’ve lost and be all square you need to stake $125.

If you get a second loss in a row you’re now out pocket to the tune of $225 which requires a stake of $281 to win it back.

Aw shit! It happened again and now you’re down $506 which means you need to gamble $633. After just 3 straight losses (which is not uncommon in the slightest) you have turned +$100 into -$506 and are throwing a further $633 at the position.

To quote the ass-hats “as you can see this strategy cannot fail” – well now, as you can quite plainly see, it can fuck you over pretty spectacularly, pretty fast. They also advise that “you have at least 8 sequences before the market takes a break”. Well, let’s see how 8 sequences of this infallible strategy actually does pan out…

Sequence	Amount Staked	Cumulative Loss
1	100	100
2	125	225
3	281	506
4	633	1,139
5	1,424	2,563
6	3,204	5,767
7	7,208	12,975
8	16,218	29,193

Hmm… what might the problem be here? Err… not being able to cover that much money? Being stopped by the house trading limit? Who knows when your luck will finally turn?

In “theory” you absolutely will win your money back, “eventually”. In reality however you will at some point be barred from making “just one more trade” and be left with a colossal loss at whatever depth you managed to dig the hole you’re now standing in.

It’s exactly the same as playing either regular or Russian Roulette – either the house limit will bring your infallible strategy to a grinding halt (maybe that’s what the name alludes to?) and leave you ruined or the bullet will go off.

Time to play with the calculator…

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