Did Martingale work for someone?
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Thread: Did Martingale work for someone?

  1. #1
    I attempted Martingale several times with different serving tools. Always had outcome. I am sure that some people today exchange Martingale and heard that some people are happy. However, I believe until certain point. Maybe it might work if to shut certain losses. But in general I'm pessimistic.

  2. #2
    Hope someone might still be alive to answer this query.

  3. #3
    Seems like everybody who tried Martingale tries to prevent even mention about it.

  4. #4
    Quote Originally Posted by ;
    I tried Martingale several times with different serving tools. Always had pitiful outcome. I am sure that some people today trade Martingale and heard that some folks are happy. But I think until particular stage. Perhaps it would work if to close certain losses. But generally I am pessimistic.
    I did try Martingale (on Scalping system). Initially it was similar to profit for 9 trades and one loss would take nearly the 80% (sometimes more) of profit. I looked difficult and seperated the signs into two egories (did statistical running and backtesting to segregage the trades) high chances of profit and reduced chances, and didn't utilize Martingale in the later.
    Today ocassionaly I do get striked out but overall Profit Factor is great.

    Hope this helps.

  5. #5
    I used it with 17 wins in a row, ordered the Ferrari then ofcourse had a losing trade where the management didn't change direction prior to my loss was huge and pretty much blew the account.

    It's got 2 major issues to over come :-

    1. You have got to let your profits run, which isn't easy after seeing moderate losses and being heavily in, if you do not another loss with lose you 10x's your profit.

    2. You want a sensible point in the sand to exit on where your reduction is manageable think 3x's your ordinary profit not entire account, and also the probability is the market will not reverse 5pips later.

    I'm working on a new system which will have averaging down so here we go again!!

  6. #6
    Martingale must do with doubling the bet size after each loss, not producing a grid. Both are mutually exclusive.

    Quote Originally Posted by ;
    Martingale has just one major problem that cannot be solved....

  7. #7
    Quote Originally Posted by ;
    I attempted Martingale several times using different serving tools. Always had result. I am certain that some people today exchange Martingale and heard that some people are happy. However, I believe until point. Maybe it would work if to close certain losses. But in general I'm pessimistic.
    From what I've read on this forum through time, I've reached the decision that very few people understand Martingale. It's a staking system that doubles your bet/position size time you lose, and reverts back to the initial bet when you win.

    With martingale, the doubling creates a 'recovery' mechanism that will automatically bring the account back to breakeven 1 unit. In other words, this MM overrides any specialized egy that is being used. Thus all martingale systems are efficiently made equal, and all will always win.

    But, there's one fatal flaw in martingale. It happens when a succession of transactions causes the doubling to spiral out of control, to the point there are insufficient funds in the account to make another double. At this point, even if a margin call hasn't occurred, the amount of drawdown is irretrievable. I've discovered this sequence referred to as the passing trade.

    Quite simply, all martingale systems are certain to win, until they suddenly and unexpectedly cause total ruin.

    It's useless to backtest martingale-based egies, because the statistical error in trying to calculate how soon a very unlikely event (the passing trade) is very likely to occur is massively great, invalidating any performance results. Some martingales might demone a 5 year old, as well as 10 year, background with no passing trade, but this can be statistically meaningless.

    There have been a lot of ideas to mitigate the effects of martingale:

    1. Instead of doubling, use a less intense staking progression (e.g. 1,1,2,3,5,8, .... Instead of 1,2,4,8,16,32, ...). However, this means it will take more than 1 win to return the account to breakeven, hence it cripples the recovery rate.

    2. Put a limit on the number of pops, i.e. revert back to 1 unit after only a few losses. Example: After 5 losses, we've dropped 1 2 4 8 16 = 31x the initial bet. So today, if we revert to 1 unit bets/positions, it will take 31 consecutive wins to atone for the 5 declines. Whereas, with 1 double, it will take only one win. In other words, an even worse way of crippling the recovery rate.

    3. Start with a very small bet/position dimensions and a huge account. Sure, this allows more doubles before ruin happens, but it doesn't fully eliminate the risk of ruin, and also reduces some return in like proportion. To describe with an extreme instance, there's not much point in making a few cents a day on a multi-million dollar account.

    4. Earning money from the account after the equilibrium has (for example) doubled, meaning we are playing with winnings only. There are three or more flaws with this approach:
    a) The passing trade could easily occur before we have the opportunity to withdraw our funds.
    B) Assuming our first stake size relies on some portion of the money held in the account, we then reduce future yields by withdrawing money.
    C) Withdrawing money reduces the number of doubles the account can defy, i.e. raises the potential risk of ruin. (In other words, the opposite notion to this conveyed in point 3).

    Martingale is gambling, not trading. If a trader has a genuine edge, he will earn money with no need to use martingale, or really any MM system that artificially props up his account balance, but is ultimately unsustainable. All any kind of MM can do, in itself, is only redistribute losses and wins (the attached XLS can be employed to show this assertion). The only exception to this rule is that increasing bet/position size in situations when probabilities are more favorable, will increase overall winnings. However, this should likewise be weighed up against any higher risk of ruin.

    One argument I've heard is that martingale is no more dangerous than horizontal (constant) betting/sizing, because without an edge the trader will lose anyway. That's true, but if I risk (say) 1% each trade, I could consistently leave ship, and re-assess the situation, if/when a certain drawdown is reached, using the majority of my capital intact. Whereas if one doubles without limit, ruin comes swiftly and without warning, permitting no such prospect.

    There isn't anything wrong with utilizing forex for a vehicle for gambling. However, I believe that it's important that the 'trader' creates an informed choice, and is totally aware of the possible benefits, and the risks, that are involved.


  8. #8
    Martingale, stops all the little SL hits before it turns that cost you.

    Martingale or taking SL hits, both appears to take a account in precisely the exact average quantity of time.

    Martingale is in theory, great in slow choppy market conditions, if GU was moving sideways for it are the very best but a 1000pip move without a let up ='s death!!

    I only average down to a limited amount :-

    Brief GU 1.5000 SL 1.5060 0.1 Lots
    Short GU 1.5020 SL 1.5060 0.2 Lots
    Short GU 1.5040 SL 1.5060 0.3 Lots

    All outside at -60, complete reduction -200 MAX (not allowing for a gap)

    Average price rises to 1.5026

    A move to 1.4950 then gets me :-

    50 (only 1st order in)
    140 (2nd order in)
    410 (all 3 orders in)

    The risks about the 3 orders are -60, -80, -60 Less risk more bang potential.

    That is the advantage of normal averaging down.

    Who's really got any account micro big enough to fully Martingale on ??

  9. #9
    Quote Originally Posted by ;
    Martingale has to do with decreasing the bet size after every reduction, not producing a grid. Both are mutually exclusive.
    Also attempted this, not just doubling (100% boost in bet size) but using a lot of other mixtures 25% boost in stakes to 200% increase. (Closing losing commerce and opening a new one in various market conditions not necessarily in precisely the same direction)... , nothing works. Why? For all those three reasons:

    1. When market moves in one direction, it takes jumps with very little retraces from the other hand and going in that particular direction may seem indefinite. Sometimes it moves thousands of pips with no showinng an adequate retrace.

    2. Gambling Rule #2: there's a limitation to how much one can lose, but no limitation to how much one wants to make.

    3. There'll always be spells of winning trades and losing trades, martingale can't endure in a sequence.

    Ps- A study in comparatively popular Quant Trading can help understanding more about Martingale trading procedure.

  10. #10
    Quote Originally Posted by ;
    3. There'll always be spells of winning trades and losing trades, martingale can't survive in a streak.
    Ahhhh the main problem with trading would be, you'll happily place your trade -200 pips into the red in the hope it'll return, but you'll never hold to 200, 10 and yes profit!!

    1 of the lads I chatted to, had a reverse martingale egy :-

    He went long, 1.5000 $1 per pip, then at 1.5005 $2 then 1.5010 $3 keep going for you add $10 or more.

    Theory being, your on trend you receive a big move you be enormous at $55 per pip fully in, any pull back after being fully in was ofcourse a killer, but as your already in profit by then it allowed him to conduct a BE SL ( EA transferred it for him I think)

    Before news, he had place orders both sides in short!!

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