
The other possibility is that I don't understand the rules well enough to implement them in code. 
The rules are, as I understand: TP= 2, SL=1. Start trading with a certain risk, say $10 win = double risk loss = go back 1 step on risk until initial risk, than if you keep on losing the initial risk stays the same. every time you win, counter = +1 every time you lose, counter = 1 (the counter never goes below 0) if the counter = 3, bank all money and start from scratch Thats it. I checked my sheet and the rules are correct, no error there. You have to make profitable trades %33, losing trades %67, using binomial random number distribution. 
1 Attachment(s) If I understand the rules correctly that's just the good ole reverse martingale limited to the 3rd level. If the system has no edge it will lose because it will randomly hit the bankruptcy level at some point (RW). If the system does have an edge 1% MM will always beat it. In the excel I offer an edge to the trader of 40% winrate with RR=2 (expectency of 0.2). Not realistic but clearly shows the point. revMarty.xlsx 
Well I apologize everybody. The simulation PipMeUp made is the correct one. I messed up one "IF" command in rules. Sorry for giving a false hope... Without the edge the mm becomes a straight loser... Thank you Pip for posting this .. 
Could the OP please comment on whether PipMeUp's spreadsheet faithfully reproduces the betting progression or to what extent it departs from it? By the way, this exercise sort of reminded me of Shannon's Daemon, also Volatility Harvesting or more recently Cover's Universal Portfolio (post #3 on NuclearPhynance thread). But you need something that doubles/halves with 50% probability for Shannon's Daemon to work, perhaps a unicorn. In other words, a 2:1 reward:risk strategy with a 50% win rate. That alone is a winner so you don't really need the fancy MM? Is the proof of this already in PipMeUp's Excel sheet? 
Firstly, thankyou guys for this fantastic work. I am just nutting over the formula now. I am unfamiliar with the RAND function but I think I can see how it's working. From the outset I can see something isn't right however. Every time the +3 net trades are made (or 8 in column B I think in this example) then the process begins again and there is at least a 50% gain (that is with my system but in formula it is an 80% gain) in capital. I will have a look to see if I can adjust myself. Thanks again guys I appreciate it. Matt. 
1 Attachment(s) I have finished my adjustments to the test. It now works as per strategy. I have to apologise for my lengthy formula as Ima self taught noob on spreadsheets and the only way I know My strategy is volatile but highly successful using this test, which was to be expected (large lot trading is rarely not volatile). What to look for is the "risk" column. It is aiming for +3 winning trades or a 1 losing trade from the starting position. It will deposit when +3 trades or withdraw when 1. It withdraws 5% of the Level column and deposits 80% which is the correct risk system. I tried my theory that I haven't really discussed much of withdrawing just 50% but it didn't work well, which is food for thought for me. Thankyou again PipMeUp and others for helping with this. Cheers Matt. Ps. If anyone spots any mistake pls let me know so I can have a look at it. Pss just changed a bit of code because of a mistake. It doesn't seem to change results by a huge amount (perhaps a little more volatile maybe). Capital Weightlifting Equity.xlsx 
It is the activity in the trading account (that is separate from your main capital) that makes the difference. Basically I am using 5% of my capital just as I would in one of 50/100% trading strategies. I try to accomplish this 3 times. If I succeed 3 times I withdraw the profits and that 5% has now become 80% of my overall capital and start again with 5%. If I win one trade and then lose the next I am still left with the original 5% risk. I do this until I either hit +3 trades or lose that 5% and deposit another 5%. So one 5% deposit can often harvest around 520 up and down trades until I hit either the bottom or top. 
On top of the simulator I also have to mention (again) that I don't believe that my winning streaks and losing streaks are entirely random. I have noticed that when the market is moving with confidence I can easily put together 3+ trades but in uncertainty, a time I try to avoid (like the next couple of days) it is difficult to put together more than a couple of winning trades. Next week however after FOMC people will be more confident to position themselves... depending on the outcome of course. So my system is built to accommodate that wave like of winning and losing. When losing only minimal risk is involved but when winning maximum profits are achieved. 
1 Attachment(s) I noticed a slight error in the code. It wasn't much and doesn't noticeably change the results. I will replace the original too. Capital Weightlifting Equity.xlsx 
I should have said reverse Martingale, or adding into winners to be more precise. 
On the spread sheet if you wanted to change the risk from 5% (is at high) it can be changed on the P/L column in the formula. 1% Risk = 16% reward. 1% (or what ever risk your using) is always kept in the account as a buffer zone for margin so the deposit of +1% from the Capital (Principal) account will = 2%. 3x 2:1 trades (from 2% deposit) will be 4,8,16%. set on 1% it almost always beats the 1% static account and quite often a great deal more with obviously a cleaner equity line. Like I said in the opening, I'm sure it's not a new strategy and even a check with google seems to bring up similar systems but I just think it suits my style of trading with multiple wins followed by a couple of losses. Cheers, Matt 
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So to summarize, I think the concept can be simplified it to just use the Bank (equity) instead of the idea of principal / trading accounts and the complexity of transferring back and forth. Since we compute the Level from Bank, and the risk from past wins/losses, we can compute trade size and P&L properly. So I edited the pnl column to keep track of all +/ wins/losses and each time it is accumulated back to the bank, so the equity curve shows the true account value. By pressing F9 repeatedly in Excel the sheet will recalculate and it's possible to see how much variation there is in different equity curves, effectively producing a different MonteCarlo run each time. Capital Weightlifting Bank.xlsx 
The excel that PipMeUp has posted is indeed a reverse martingale system and is different from what Matts Micro has posted. The main difference is that when there is a loss, reverse martingale will have you start back at the original risk while Matts Micro will have you back at your last risk. Back when Rags2Riches was 1st active with his thread, i tested this exact same money management. When compared to a win 2 lose 1 50% win rate compounding system i found that this system did perform slightly better. But of course, the trade off is larger draw downs and swings into appreciation. Of course you must also take into account that your trading system is largely the cause of success in this money management system. If you have more streaks of losses or wins then this system will outperform regular 2 win 1 loss compounding in a good or a bad market. 
I really appreciate the time your putting toward this. I think you may of misread my sheet (it's a mess I know heh). I am going to try to add another column with the trading account balance to show you what I mean (a bit slow with these thing I represented a 3rd net win (3 wins in total) with a zero (0). I used this so I could formulate it. I think your sheet references that 0 as a loss and hence it is only able to produce a two winning streak. As I said I will try another column to show you what I mean. Cheers Matt. Edit: Lol I think I was about there and my spread sheet crashed... still have partial formula.... 
My question is .. IS IT POSSIBLE TO USE THIS STRATEGY IN BINARY OPTIONS TRADING? PLS EXPLAIN IF SO. 

But yes you can use it for whatever type of trading you desire. 
you're right, something is very wrong. Will have to get back to you on this.. 
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