Use of martingale strategy
Členem od Dec 07, 2012
4 příspěvků
Jan 28, 2013 at 06:16
i am watching a martingale strategy that has been going on for a year now and has been very profitable. however right now its close to disaster point. trades the UC pair and has been recently adding in short positions 1.5x last lot size. yikes!!!
Členem od Sep 16, 2009
190 příspěvků
Jan 28, 2013 at 09:31
Hi ...
I'm using this martingale EA which works in 2 directions all the time. All the time a part of the orders is hedged. The EA produces a consistent daily profit of an average of 0.5% ... The draw down till now never exceeds 0.51% of total equity. The expected profit ifor current month s 15.85%.
I agree that the testing period is still short, capital is not considerably small, but DD and profit are giving very good records.
Here is the link to it ... https://www.myfxbook.com/members/oshaban/fx-ct-onemonthtest/472198
I'm using this martingale EA which works in 2 directions all the time. All the time a part of the orders is hedged. The EA produces a consistent daily profit of an average of 0.5% ... The draw down till now never exceeds 0.51% of total equity. The expected profit ifor current month s 15.85%.
I agree that the testing period is still short, capital is not considerably small, but DD and profit are giving very good records.
Here is the link to it ... https://www.myfxbook.com/members/oshaban/fx-ct-onemonthtest/472198
... oshaban ... skype: oshaban27 ...
Členem od May 15, 2012
247 příspěvků
Jan 29, 2013 at 12:22
(Upravené Jan 29, 2013 at 12:27)
trading the EU with pipstep 25 will earth your account sooner or later, sorry oshaban but I did this before.... since you started EU did not moved much so...... at least you started with an high balance for this, thats good
Členem od Sep 16, 2009
190 příspěvků
Jan 29, 2013 at 13:27
Quick100 posted:
trading the EU with pipstep 25 will earth your account sooner or later, sorry oshaban but I did this before.... since you started EU did not moved much so...... at least you started with an high balance for this, thats good
Hi Derk ...
Because you don't know exactly how TP (retracement in pips) is taken, you are right to think like that. As long as more lots are opened, the EA needs less pips to close all orders in that direction on profit. I know, this is obvious, but what I use here is really not.
Anyway, I think, it is better to wait and see :)
Thanks for your comment ... Good luck :)
... oshaban ... skype: oshaban27 ...
Členem od Sep 16, 2009
190 příspěvků
Jan 29, 2013 at 13:30
By the way, few months ago, I run the same EA with different settings and on 3 pairs ... the DD was almost 46% which is too high for me ... I believe settings was the problem and also using 3 pairs will exponentially increase the DD.
I believe, in the worst case, the DD could reach 15-20%. I will extend the test period for more months or at least wait for huge market movements to see if it will pass it safely :)
Here is the link to my old test ... https://www.myfxbook.com/members/oshaban/fx-ct-v3-multipairs-pp/364927
I believe, in the worst case, the DD could reach 15-20%. I will extend the test period for more months or at least wait for huge market movements to see if it will pass it safely :)
Here is the link to my old test ... https://www.myfxbook.com/members/oshaban/fx-ct-v3-multipairs-pp/364927
... oshaban ... skype: oshaban27 ...
Členem od May 15, 2012
247 příspěvků
Jan 29, 2013 at 13:32
wish you good luck
Členem od Sep 16, 2009
190 příspěvků
Jan 29, 2013 at 13:36
You too, Dirk :)
Thanks.
Thanks.
... oshaban ... skype: oshaban27 ...
Členem od Dec 23, 2012
11 příspěvků
Feb 13, 2013 at 19:00
Členem od Feb 20, 2013
1 příspěvků
Feb 20, 2013 at 14:47
The Martingale system is for people who don't mind eventually blowing up the account, and who know about regression to the mean but not about long term statistical consequences. It isn't for people looking to make a living off forex. It isn't even an elegant way to use statistics; flipped coins care about previous flips about as much as a duck cares about the stock market. Similarly, if the trading vehicle starts trending upwards when you decided you would martingale it short, then you are playing russian roulette.
For little retail forex competitions, sure, use it. For anything like a living in the real world? Nope.
For little retail forex competitions, sure, use it. For anything like a living in the real world? Nope.
Členem od May 15, 2012
247 příspěvků
Feb 22, 2013 at 09:45
Well, this isnt the whole pic Jotto999,
real Investors split their money into 80-90% safe investments and 10-20% into risk investments.
nd for this any system which brings money in is welcome to them. Of course using these crazy
martiangale systems using doubling ls with every trade, well, perhaps have an closer look to miy systems
runnung now since May last year within an real account too.......
real Investors split their money into 80-90% safe investments and 10-20% into risk investments.
nd for this any system which brings money in is welcome to them. Of course using these crazy
martiangale systems using doubling ls with every trade, well, perhaps have an closer look to miy systems
runnung now since May last year within an real account too.......
Členem od Oct 12, 2012
70 příspěvků
Feb 22, 2013 at 10:11
'real Investors split their money into 80-90% safe investments and 10-20% into risk investments.'
Agreed, but Martingale isn't a risky investment, it's insane.
Sure, you've survived since May last year. Not a very long time yet.
I wish you luck, though...
Agreed, but Martingale isn't a risky investment, it's insane.
Sure, you've survived since May last year. Not a very long time yet.
I wish you luck, though...
Členem od Jan 19, 2013
251 příspěvků
Feb 22, 2013 at 14:26
It isn't about survival. Its about earning profit. As of right now this month I am up over 100% No swing trader can preform that. Not in one year, or even 5. So you can't look into the future, as it is filled with insecurity. Scalping + martingale is the way to go. I've used it and it has worked well. I actually use Martingale on 3% of my trades. Which has resulted in a total of negative 17 pips profit, but over 100%. Investing is by far the most risky investment of them all... Look at 2008! When they pull the plug on the market, you won't have a chance of getting out.
forex_trader_4570
Členem od Dec 17, 2009
37 příspěvků
Feb 22, 2013 at 16:59
This is a great topic!
I've written several EAs, some of which were martingales, so I have a few thoughts on the subject. With martingale EAs, it's all about losing streaks. If the underlying strategy can avoid long losing streaks, the EA can be profitable. However, market conditions are always changing and if a martingale EA starts suffering losing streaks of 4 or 5 trades then it's time to get out or re-optimize the EA.
As an EA designer I know one thing for sure, it's a lot easier to write a profitable martingale EA than non-martingale. That's because the martingale strategy can hide the underlying weakness of the trading strategy. It can hide it for a while, but not forever, and that's when an account blows up. The EA needs to win AT LEAST 50% of it's trades or the danger of a losing streak is too high. The higher the percentage, the better. If you're using a martingale that is winning less than 50% I would highly recommend getting out while the getting is good!
All martingales use a doubling strategy, whether it's lot size, pips, or a combination. The riskiest are the ones that double the lot size. They can get in trouble the fastest. I personally prefer a combination because when you increase the number of pips you are naturally slowing things down when a losing streak occurs, making it take longer to blow the account up. Blessing is a good example. The problem is you're still going for the lowest common denominator gain, and when the pip size get's big enough it can take daaaaays to realize that small profit. Lets say you're going for a $1 profit through a combination of pips and lot size. When you lose, the next trade goal will be $2. If you lose that, you've now lost $3 and the next goal is $4, so you're going for that same $1 profit. Lose that, and you've lost $7 with the next trade goal being $8. No matter how long the losing streak gets, you're still going for that $1 gain.
The bottom line for me is I don't use them any more. The risk/reward ratio is just too high for the small gains.
I've written several EAs, some of which were martingales, so I have a few thoughts on the subject. With martingale EAs, it's all about losing streaks. If the underlying strategy can avoid long losing streaks, the EA can be profitable. However, market conditions are always changing and if a martingale EA starts suffering losing streaks of 4 or 5 trades then it's time to get out or re-optimize the EA.
As an EA designer I know one thing for sure, it's a lot easier to write a profitable martingale EA than non-martingale. That's because the martingale strategy can hide the underlying weakness of the trading strategy. It can hide it for a while, but not forever, and that's when an account blows up. The EA needs to win AT LEAST 50% of it's trades or the danger of a losing streak is too high. The higher the percentage, the better. If you're using a martingale that is winning less than 50% I would highly recommend getting out while the getting is good!
All martingales use a doubling strategy, whether it's lot size, pips, or a combination. The riskiest are the ones that double the lot size. They can get in trouble the fastest. I personally prefer a combination because when you increase the number of pips you are naturally slowing things down when a losing streak occurs, making it take longer to blow the account up. Blessing is a good example. The problem is you're still going for the lowest common denominator gain, and when the pip size get's big enough it can take daaaaays to realize that small profit. Lets say you're going for a $1 profit through a combination of pips and lot size. When you lose, the next trade goal will be $2. If you lose that, you've now lost $3 and the next goal is $4, so you're going for that same $1 profit. Lose that, and you've lost $7 with the next trade goal being $8. No matter how long the losing streak gets, you're still going for that $1 gain.
The bottom line for me is I don't use them any more. The risk/reward ratio is just too high for the small gains.
Členem od Oct 12, 2012
70 příspěvků
Feb 22, 2013 at 17:35
Exactly...
'That's because the martingale strategy can hide the underlying weakness of the trading strategy.'
If it is to be successful in the long haul, it has to 1. Be at 1:1 RR and 2. Win over 50% of the trades.
(In which case you will win, wether you martingale or not.)
It can still blow your account though.
Compare this with roulette, where you are win 47,6% of the time on Red (or Black), unless you play on an american wheel, where you are worse off.
Your bank will blow pretty soon anyway. It is just a matter of #spins.
'That's because the martingale strategy can hide the underlying weakness of the trading strategy.'
If it is to be successful in the long haul, it has to 1. Be at 1:1 RR and 2. Win over 50% of the trades.
(In which case you will win, wether you martingale or not.)
It can still blow your account though.
Compare this with roulette, where you are win 47,6% of the time on Red (or Black), unless you play on an american wheel, where you are worse off.
Your bank will blow pretty soon anyway. It is just a matter of #spins.
Členem od Jan 19, 2013
251 příspěvků
Feb 22, 2013 at 17:40
ppentz posted:
This is a great topic!
I've written several EAs, some of which were martingales, so I have a few thoughts on the subject. With martingale EAs, it's all about losing streaks. If the underlying strategy can avoid long losing streaks, the EA can be profitable. However, market conditions are always changing and if a martingale EA starts suffering losing streaks of 4 or 5 trades then it's time to get out or re-optimize the EA.
As an EA designer I know one thing for sure, it's a lot easier to write a profitable martingale EA than non-martingale. That's because the martingale strategy can hide the underlying weakness of the trading strategy. It can hide it for a while, but not forever, and that's when an account blows up. The EA needs to win AT LEAST 50% of it's trades or the danger of a losing streak is too high. The higher the percentage, the better. If you're using a martingale that is winning less than 50% I would highly recommend getting out while the getting is good!
All martingales use a doubling strategy, whether it's lot size, pips, or a combination. The riskiest are the ones that double the lot size. They can get in trouble the fastest. I personally prefer a combination because when you increase the number of pips you are naturally slowing things down when a losing streak occurs, making it take longer to blow the account up. Blessing is a good example. The problem is you're still going for the lowest common denominator gain, and when the pip size get's big enough it can take daaaaays to realize that small profit. Lets say you're going for a $1 profit through a combination of pips and lot size. When you lose, the next trade goal will be $2. If you lose that, you've now lost $3 and the next goal is $4, so you're going for that same $1 profit. Lose that, and you've lost $7 with the next trade goal being $8. No matter how long the losing streak gets, you're still going for that $1 gain.
The bottom line for me is I don't use them any more. The risk/reward ratio is just too high for the small gains.
Very well said. The actual 'system' is the key here. Using my method. I have not experienced more then 4 consecutive losses. My first order is usually 1 dollar, second is 3 or 7 and the third is 30 dollars a point. It isn't so much scaling up after every loss. Its the fact that my entries are very specific. Every time the price closes against my entry, even if it is a 1 pip loss. I close and go the opposite direction. People fail to realize that certain prices (on lower tf) are not accumulation prices. If you can figure out those prices. You should be able to pull off 100% weeks with a lot of ease.
Členem od Jan 19, 2013
251 příspěvků
Feb 22, 2013 at 17:46
Ironman posted:
Exactly...
'That's because the martingale strategy can hide the underlying weakness of the trading strategy.'
If it is to be successful in the long haul, it has to 1. Be at 1:1 RR and 2. Win over 50% of the trades.
(In which case you will win, wether you martingale or not.)
It can still blow your account though.
Compare this with roulette, where you are win 47,6% of the time on Red (or Black), unless you play on an american wheel, where you are worse off.
Your bank will blow pretty soon anyway. It is just a matter of #spins.
NOT EVEN THE BIG BANKS are successful in the long haul. We can't think long haul. To many things will happen which will effect the prices and the daily trading ranges. The best traders in the world make money over night. Not by holding a position for 5 years.
Členem od Oct 12, 2012
70 příspěvků
Feb 22, 2013 at 17:57
If you don't plan for the long haul, you might as well go with roulette.
My example above is the basic criteria to pull martingale of over an extended amount of time, and even that is not a guarantee, as I clearly wrote.
Anything else than that will not win. It is that simple.
So, we'll talk again in a year or two.. :)
My example above is the basic criteria to pull martingale of over an extended amount of time, and even that is not a guarantee, as I clearly wrote.
Anything else than that will not win. It is that simple.
So, we'll talk again in a year or two.. :)
Členem od Jan 19, 2013
251 příspěvků
Feb 22, 2013 at 18:03
Ironman posted:
If you don't plan for the long haul, you might as well go with roulette.
My example above is the basic criteria to pull martingale of over an extended amount of time, and even that is not a guarantee, as I clearly wrote.
Anything else than that will not win. It is that simple.
So, we'll talk again in a year or two.. :)
It seems as if your using 'TIME' as an excuse to let your losing position ride! Please check my trades. I've WON! since I've opened that account. This week along up 100%... As long as the market doesn't stay flat, one will be able to take advantage of the price action. I don't understand how 'planning' and 'preforming' are considered 'one'. You can 'PLAN' to have a child, and it never happen. Forex is exactly the same. To preform partakes things which the avg joe can not study online. 95% of the losers in forex think exactly as you do.
Členem od Oct 12, 2012
70 příspěvků
Feb 22, 2013 at 18:19
What?
Just... what?
I don't run any losing positions. They have strict exits.
Good luck to you... Since I'm talking apples and you're talking... well, something else, I really don't know from where you are coming.
What has anything to do with how I let losing positions run? Geez...
Just... what?
I don't run any losing positions. They have strict exits.
Good luck to you... Since I'm talking apples and you're talking... well, something else, I really don't know from where you are coming.
What has anything to do with how I let losing positions run? Geez...
forex_trader_4570
Členem od Dec 17, 2009
37 příspěvků
Feb 22, 2013 at 18:20
Continuing with the Roulette analogy ... a martingale that uses a good trading strategy is analogous to adding red spaces on the roulette wheel to make your odds better than 47% ... 50% ... maybe even 60%. It's easy to see the more red spaces you have, the less likely you'll encounter a losing streak. The odds are less, but a losing streak COULD STILL HAPPEN. Odds are a strange thing. If, while flipping a coin, you flip 10 heads in a row. Are the odds any less of the 11th flip being heads? No, it's still 50-50.
I still think a martingale can be a viable strategy *if* you understand the risks and the underlying strategy is sound. Those losing streaks sure make my stomach hurt, though!
I still think a martingale can be a viable strategy *if* you understand the risks and the underlying strategy is sound. Those losing streaks sure make my stomach hurt, though!
