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Adding size
Why can a martingale backtest look smooth, and then fail once?
Martingale
What it bets
After a string of losses, the next trade will win, and the larger size will earn back the earlier losses in one trade.
How the rule is written
After a loss, increase the next trade by a fixed multiple. Doubling is the common choice. After a win, go back to the starting size. It can be wrapped around almost any entry and exit. It stays on this list so it can be recognized and put to a test. That is not advice to use it.
When it fails
The number of losses in a row will pass the number of increases the account can fund. Before the account is back to even, size is already large enough that one loss exceeds the margin, or the drawdown is too deep to accept. A smooth curve often means that string of losses has not arrived yet.
Do not confuse it with
A grid also buys more as price falls, but the size of each rung is usually laid out in advance. A martingale multiplies the next trade by how many losses have stacked up. Anti-martingale refuses that increase.