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Martingale... How to make it WORK for YOU!

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  • #1
  • First Post: Edited Jan 1, 2013 9:43am Oct 19, 2012 8:18pm | Edited Jan 1, 2013 9:43am
I am going to keep it short simple and to the point.


"Trading is SIMPLE....OVER THINKING is HARD!"



To use martingale and make it work for you...there is only 3 factors you need to consider.........


1.) Account Funds!

2.) Maximum Draw Down you are willing to let your account go to.

3.) Possible entries into a trade that your will system give in a given period.


Using martingale is not crazy nor is it impossible to make a profit. You do not need millions and billions of dollars to make it work.

When using martingale with a system...you MUST know how many possible positions you might have in that time frame.

Once you know that the rest is simple MATH!(ADD,SUBTRACT, MULTIPLY,DIVIDE)


1.) Account Funds = $10,000

2.) Max Draw Down = 16%

3.) Possible Entries = 12 trades on the H1


When finding your "Trading Capital" you need to take your total account balance and divide it by your Max RISK...

$10,000 / .16 = $1,600

So our Trading Capital per day will be $1,600.

Now that we know our max RISK for the martingale setup we know that we will make at least a X% gain on the "Trading Capital" for the day.

1, 2, 4, 8, 16............You double up your risk percent every trade till that one trade hits your TP (1:1).....Which makes your money back(if not more) and gives the % per day you wanted!

The point of this thread is to know how to use martingale SMARTLY! and to use Money Management while doing so........

As long as you know how many changes you could have in the trading system you are using...which is SUPER SIMPLE TO KNOW...and if you do not already know...Your not serious about trading and need to keep that day job!

For you that can not think of the BIG PICTURE....there are 5 trading days in 1 week...and about 20 in 1 month....So thats 20% per month or 240% per YEAR.......ROI!...Of course if you compound Daily,Weekly or Monthy instead of Yearly...you could make more...... K.I.S.S......Keep It Simple Stupid!
  • #2
  • Oct 19, 2012 8:27pm Oct 19, 2012 8:27pm
Let the hateful posts start!..........lol
  • #3
  • Oct 19, 2012 8:31pm Oct 19, 2012 8:31pm
When do you double?
  • #4
  • Oct 19, 2012 8:36pm Oct 19, 2012 8:36pm
Are you being serious?


WHEN YOUR SL IS HIT....I know you are not telling me out of 24 hours in 1 day you can not make 1 profitable trade that hits a 1:1 Risk:Reward.....
  • #5
  • Edited 9:12pm Oct 19, 2012 8:44pm | Edited 9:12pm
SAY IT AINT SO!......lmao!


Inserted Video
  • #6
  • Edited 9:43pm Oct 19, 2012 9:28pm | Edited 9:43pm
OH YeA....................Your about to see why this song was posted!

For everyone that was in chat or knows me......you remember R.O.N.........You just learned the SECRET!

Inserted Video
  • #7
  • Oct 20, 2012 1:43am Oct 20, 2012 1:43am
Quoting Dredding82
$1000 / 16% = $160

Now that we know our max RISK for the martingale setup we know that we will make at least a 1% gain on the account for the day.

1, 2, 4, 8, 16............You double up your risk percent every trade till that one trade hits your TP (1:1).....Which makes your money back(if not more) and gives the 1% per day you wanted!
Starting at 1% risk, it only takes 4 consecutive losses to hit your maximum risk. Not to mention that you would have lost another 1+2+4+8 = 15% in the process. That's sums up to almost a third of your account. Quite dramatic, don't you think? Also I don't feel like risking 31% to gain 1%.
  • #8
  • Oct 20, 2012 2:40am Oct 20, 2012 2:40am
Well, yes, smart Martingale can work for a long time.

Real example, that assumes, that maket ranges more than itīs trending:

http://www.myfxbook.com/members/Jaym...-martin/195905

But looking at GU weekly itīs no wonder the acc lasted so long, when it really starts to trend, itīll blow.

If you have huge acc and you are willing to hit losing steaks and suffer bad DD - maybe you can consider Marty, but the down side also is, that it makes you lazier and worse trader. I have been there.
Not for me anyway.
F_ck your analysis, I know exactly where the market will go. To the right.
  • #9
  • Oct 20, 2012 3:34am Oct 20, 2012 3:34am
taxi driver. i love ur signature man. hehehe.

anyway, crappy forex factory. upgrade or allow the multi quote thingy man!

im about to try this marty thing, judge dredd.
bit . ly/fantestimonials
  • #10
  • Oct 20, 2012 5:33am Oct 20, 2012 5:33am
Quoting Barbossa
Starting at 1% risk, it only takes 4 consecutive losses to hit your maximum risk. Not to mention that you would have lost another 1+2+4+8 = 15% in the process. That's sums up to almost a third of your account. Quite dramatic, don't you think? Also I don't feel like risking 31% to gain 1%.

"You have to RISK money to MAKE money"

And yes i think it is quite dramatic to make a small %.....but you either need a good risk to reward with a good hit rate(Freebie Systems)...or you just need to be right a shit load of times.

And like i said....you use it with YOUR system...I know your not telling me in 24 hours you can not make just 1 profitable trade that hits a 1:1 Risk to Reward....
  • #11
  • Oct 20, 2012 5:37am Oct 20, 2012 5:37am
Quoting Taxi Driver
Well, yes, smart Martingale can work for a long time.

Real example, that assumes, that maket ranges more than itīs trending:

http://www.myfxbook.com/members/Jaym...-martin/195905

But looking at GU weekly itīs no wonder the acc lasted so long, when it really starts to trend, itīll blow.

If you have huge acc and you are willing to hit losing steaks and suffer bad DD - maybe you can consider Marty, but the down side also is, that it makes you lazier and worse trader. I have been there.
Not for me anyway.
I understand what you are saying...but ranging or trending really does not matter as long as you have a system that can get you into a position.
You are not holding your position but till your TP is hit...then you STOP for the day....thats 1%...if you hit it the first trade thats only a Max DD of 1%....2nd trade 3%.....etc etc etc....

As far as having a huge account.......that is where using martingale SMARTLY with Money Management comes in....Knowing what period you use on your indicators will give you the possible entries you might have for the period you are trading...its all simple math.

I understand for newbies it might sound crazy to be able to win 1 out of 4 trades....but that is very simple and so easy with only 1 or 2 indicators a child could do it.
  • #12
  • Oct 20, 2012 5:42am Oct 20, 2012 5:42am
Martingale has killed so many accounts, but
only because they didnīt stop doubling their lot-size at a defined
point.

On the other hand, starting with 1% risk,
1 - 2 - 4 - 8 - 16 will bring you near a margin call for certain
and from there it is only luck which would let you survive.

Well, says the smart trader,
then I only go 1 - 2 - 4 , not more and accept the loss, which will be
7 % of my account.

Oh no, I had 5 stupid losses of 7 % each in a row, now
about 35 % of my account is gone. Better look for something else.

Next smart trader will tell you: Donīt use a strategy which gives you 5 losses in a row. Use a strategy which gives you 2 losses in a row maximum.
Then only 14 % will be gone and with good luck you can recover.

So, Dredding82 , everybody knows you are smart and profitable.
A few questions to you:

1. What strategy for entry and SL do you use which prevents you from
a row of losses ?

2. How deep is the hole for you ? What is the max progression for you ?
  • #13
  • Oct 20, 2012 5:56am Oct 20, 2012 5:56am
Horrible. Its a very stressful method of trading.

Roulette guys have been trying this for ever.

If you read market wizards one of the best day traders ever,said if your one of the top day traders around,if you trade long enough you will have 10 losses in a row.

First your not even the top day trader on this forum.

Second if this worked why are hedge fund mangers using this method?

You go agressive in trading when your winning...like bill williams adding to winning postions. Play defence when your losing.things happen in streaks take advantage of winning runs and defend losing runs as these must happen.I increase after every win I have.Decrease after every loser I have.
  • #14
  • Oct 20, 2012 5:59am Oct 20, 2012 5:59am
Quoting fxtr51
Martingale has killed so many accounts, but
only because they didnīt stop doubling their lot-size at a defined
point.

On the other hand, starting with 1% risk,
1 - 2 - 4 - 8 - 16 will bring you near a margin call for certain
and from there it is only luck which would let you survive.

Well, says the smart trader,
then I only go 1 - 2 - 4 , not more and accept the loss, which will be
7 % of my account.

Oh no, I had 5 stupid losses of 7 % each in a row, now
about 35 % of my account is gone. Better look for something else.

Next...
My entry and SL is not important...this is a Money Management system to apply to your own TA.....

I hit my 1:1 TP within 4 trades ...it can not take anymore due the the period the indicators use.

As for others who do not know what REAL MONEY MANAGEMENT IS....lets get down to the simple math.

You never trade off your ACCOUNT BALANCE.....

$10,000.00 account

16% MAX Draw Down

$1,600....this is your "Account Balance" you will use for your Money Management every day.

So if i want to make 1% per day....it would be 1% of the $1,600. Which is only $16 bucks....it does not sound like alot...but does your bank pay you $16 bucks per day?

That is REAL money management.....So blowing an account is only due to POOR money management...and the lack of understanding on how to trade.

Of course if you add the compouding affect....your "Account balance" will change a bit each day....but you compound Daily,Weekly or Monthly.....not every fricking trade...
  • #15
  • Oct 20, 2012 6:07am Oct 20, 2012 6:07am
Quoting goose4
Horrible. Its a very stressful method of trading.

Roulette guys have been trying this for ever.

If you read market wizards one of the best day traders ever,said if your one of the top day traders around,if you trade long enough you will have 10 losses in a row.

First your not even the top day trader on this forum.

Second if this worked why are hedge fund mangers using this method?

You go agressive in trading when your winning...like bill williams adding to winning postions. Play defence when your losing.things happen in streaks...
I see why you have been on Forex Factory now for 3 years.....lol
  • #16
  • Oct 20, 2012 7:07am Oct 20, 2012 7:07am
stochastic-processes.pdf (application/pdf Object)

for those who may wish to delge further,just ignore the eqations ,theres some good reading

you can bypass the rest ,martingales page 117,but its all good read
  • #17
  • Oct 20, 2012 7:31am Oct 20, 2012 7:31am
yes its a bit heavy reading,but the bottom line is the only martingale that can work is sub martingale,but even then we are never sure of the point in which we stop,

if sombody was able to work that out,then the game would be over,

everthing else is pure luck
  • #18
  • Oct 20, 2012 7:55am Oct 20, 2012 7:55am
I agree with what Dred is saying as it makes completely perfect sense...if your system doesnt have at least a 25% hit rate than something truly is wrong.....and thats all you really need for this thing to work. 1/4 trades to be profitable because think about it guys...you lose the first trade and you are down 1% so you double up the next trade and lets say you lose 2% so you double up the next trade than you lose 4% and double up the next trade which you are risking 8% and that trade hits 1:1 so than there is your 1% of profitability but it comes down to how much you trust your system or strategy or whatever it is your doing and if you are confident enough to be able to commit to the ultimate max drawdown which in this example is 15%. I admit this may seem a bit extreme but when you really break it down I mean if you are a serious trader than you serioiusly should be able to win 1/4 trades and you should be able to stomach a little drawdown. And for those of you who are not capable than maybe this thread just simply may not be for you. This business is all about making money and as they say scared money don't make money and this is just another money management technique to make money. If you need to even like I am about to do than you can even just have a seperate martingale account that is just for fun or just to attempt to make this thing work and make that 1% a day which is all you need to be rich or very wealthy later down the line after compounding as dredding mentions...and keep your regular account for normal money management strategies assuming you are an experienced trader that does have different money management techniques in the bag already...
No man is free who is not a master of himself. -P.M.-
  • #19
  • Oct 20, 2012 8:02am Oct 20, 2012 8:02am
Quoting diceman555
yes its a bit heavy reading,but the bottom line is the only martingale that can work is sub martingale,but even then we are never sure of the point in which we stop,

if sombody was able to work that out,then the game would be over,

everthing else is pure luck

The point at which you stop is the point when you reach the max drawdown that you have set aside for this. Which the example I gave was 15% so once I lose 15% I stop and just try again the next day...
No man is free who is not a master of himself. -P.M.-
  • #20
  • Oct 20, 2012 8:02am Oct 20, 2012 8:02am
Quoting pmullin86
I agree with what Dred is saying as it makes completely perfect sense...if your system doesnt have at least a 25% hit rate than something truly is wrong.....and thats all you really need for this thing to work. 1/4 trades to be profitable because think about it guys...you lose the first trade and you are down 1% so you double up the next trade and lets say you lose 2% so you double up the next trade than you lose 4% and double up the next trade which you are risking 8% and that trade hits 1:1 so than there is your 1% of profitability but it comes...
sounds good,

but the outcome of trade 4 or trade 5 has no bearing on those previous trades whats so ever,every trade has its probability of the ratio of your % win rate,you could infact go 20 trades without a win,a good system can manage those losses,your method will blow the account
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