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Playing Russian Roulette with Martingales

  • #41
  • Edited 7:18pm Oct 14, 2017 9:09am | Edited 7:18pm
Quoting HeyYou
{quote} I'm considering the averaging down/martingale thing only now, it seems that it is the fastest way to grow a small account. here's the idea... I would choose the pair/instrument that tends to move strongly in one direction.. no need to diversify, only one pair/instrument . Then I would place a grid that allows me to "be wrong" at least 5 times. no actual multiplier, position size would be based on equity. I would treat each position separatelly and close it when it's 20-30 pips in profit, never in loss. start all over when I'm up 500%, no...
Sorry guys. I deleted my prior post as it was an ill conceived brain fart with a fundamental weakness. Carry on Sergeant Major :-)
  • #42
  • Oct 14, 2017 9:14am Oct 14, 2017 9:14am
Quoting Copernicus
{quote} Sorry guys. I deleted my prior post as it was an ill conceived brain fart with a fundamental weakness. Carry on Sargeant Major :-)
Lol, I also deleted my post for the same reason.

This forum drives us nuts
  • #43
  • Oct 14, 2017 9:19am Oct 14, 2017 9:19am
Quoting HeyYou
{quote} Lol, I also deleted my post for the same reason. This forum drives us nuts
Sure is mate. I am thinking that a bit of a holiday is in order. :-)
  • #44
  • Edited 9:57am Oct 14, 2017 9:36am | Edited 9:57am
Quoting Copernicus
{quote} Sure is mate. I am thinking that a bit of a holiday is in order. :-)
Let's do it.
  • #45
  • Oct 14, 2017 5:58pm Oct 14, 2017 5:58pm
Quoting HeyYou
{quote} Let's do it.
Done.....

Now this looks like a nice place :-)

Attached Image
  • #46
  • Oct 14, 2017 7:47pm Oct 14, 2017 7:47pm
Quoting Copernicus
{quote} Done..... Now this looks like a nice place :-) {image}

yikes mate after watching the movie
people leave, but this thread will go on for ever
  • #47
  • Oct 15, 2017 11:32pm Oct 15, 2017 11:32pm
Quoting Copernicus
{quote} When applying the martingale it is probably a wise strategy not to overdo it. Consider a Martingale as a form of retracement entry when you are sure you are trading in the direction of positive bias perhaps of 3 to 4 levels (limited by a stop condition you would naturally use for a single trade entry). What you therefore do is divide that typical stop distance into the number of levels you wish to apply and then apply the progression entry to it. What you are trying to achieve is a good average price on entry without overdoing it. You don't...
How can a martingale deal with a profitable strategy that has 50 consecutive losses over 1000 or 10000 or 100000 trades?
You came here for the truth and let me unveil it for you
  • #48
  • Oct 16, 2017 1:05am Oct 16, 2017 1:05am
Use some sort of martingale strategy only for recovery and not as a system.
  • #49
  • Oct 17, 2017 10:37am Oct 17, 2017 10:37am
Quoting RondaRousey
{quote} How can a martingale deal with a profitable strategy that has 50 consecutive losses over 1000 or 10000 or 100000 trades?
if its profitable already, why use a martingale if the strategy has 50 consecutive losses over 1000 or 10000 or 100000 trades ?
  • #50
  • Oct 17, 2017 10:53pm Oct 17, 2017 10:53pm
Quoting metta87
{quote} if its profitable already, why use a martingale if the strategy has 50 consecutive losses over 1000 or 10000 or 100000 trades ?
If a martingale has no edge why use it?

Ed Thorp increased his bets in blackjack when he had an edge in the card count, not when he had losses.

Just saying

You came here for the truth and let me unveil it for you
  • #51
  • Oct 18, 2017 6:23am Oct 18, 2017 6:23am
Quoting RondaRousey
{quote} If a martingale has no edge why use it? Ed Thorp increased his bets in blackjack when he had an edge in the card count, not when he had losses. Just saying
So how would he deal with a 50 consecutive losses streak in forex ? Just asking
  • #52
  • Oct 18, 2017 9:09am Oct 18, 2017 9:09am
Quoting metta87
{quote} So how would he deal with a 50 consecutive losses streak in forex ? Just asking
you need to elaborate a little bit more about "50 consecutive losses". I just could not figure out how that would be possible unless you place 50 orders with 1 pip distance in a sharp 50 pip movement with no retracement (news, spike, etc).
As Above, So Below
  • #53
  • Oct 18, 2017 12:58pm Oct 18, 2017 12:58pm
Quoting tashkent
{quote} you need to elaborate a little bit more about "50 consecutive losses". I just could not figure out how that would be possible unless you place 50 orders with 1 pip distance in a sharp 50 pip movement with no retracement (news, spike, etc).
well Rondarousey came up with this a couple posts above not me, maybe she will elaborate a little bit more. Imho I also believe that 50 losses is too much, but the martingale sequence doesnt need to go that far for it to be catastrophic tho, 10-12 is enough.
  • #54
  • Edited Oct 19, 2017 8:53am Oct 18, 2017 3:18pm | Edited Oct 19, 2017 8:53am
bla bla bla
  • #55
  • Oct 18, 2017 3:44pm Oct 18, 2017 3:44pm
Quoting metta87
{quote} well Rondarousey came up with this a couple posts above not me, maybe she will elaborate a little bit more. Imho I also believe that 50 losses is too much, but the martingale sequence doesnt need to go that far for it to be catastrophic tho, 10-12 is enough.
It depends on how you view trading.
If you think it is a sprint say 10-30 trades then using a martingale boosts returns.
If you think it's a never ending marathon ie over 10000 or over 1 million trades then using a martingale is dangerous.
Although 50 consecutive trades is rare, over 1 million trades it happens.

btw there are many japanese daytraders that have over a million trades.
You came here for the truth and let me unveil it for you
  • #56
  • Oct 18, 2017 3:47pm Oct 18, 2017 3:47pm
Quoting Copernicus
{quote}however there are certainly instances today with Spot Gold, Silver and other commodities where an opportunity exists to apply a Martingale progression with a capped downside risk. For example refer to the monthly chart of Brent below and this applies to quite a large number of instruments at historical lows.
silver, gold and oil are far from their historical lows and the only one I think of is VIX.
have limit orders in place at the moment @ $ 11.00
  • #57
  • Oct 18, 2017 4:12pm Oct 18, 2017 4:12pm
Quoting yonnie
{quote} silver, gold and oil are far from their historical lows and the only one I think of is VIX. have limit orders in place at the moment @ $ 11.00
Yep. Sugar, wheat and energies are my priorities at the moment. Vix is a good one but not in my watchlist...but thanks for the tip Y...it shortly will be :-) It's nice being in a situation where the downside is capped The only prerequisite you need then is patience :-)
  • #58
  • Oct 18, 2017 4:19pm Oct 18, 2017 4:19pm
hi C.
must admit I keep a weary eye out for when this bull run in equities will run out and the inevitable crash will happen.
the commodities probably will hit rock bottom, so not keen on buying them at their current price.
VIX is another matter ofcourse - it will only go up like crazy when a crash happens.
out of curiosity: when will VIX be on your list?
  • #59
  • Oct 19, 2017 12:10am Oct 19, 2017 12:10am
Quoting RondaRousey
{quote} If a martingale has no edge why use it? Ed Thorp increased his bets in blackjack when he had an edge in the card count, not when he had losses. Just saying
Funny you mentioned...
So, how did Ed Thorp come to have those edges?
Was it derived as a conclusion from number of losses previous he decided now he has an edge?
I believe so!
His playing was build on prerequisite losing, to arrive to the perceived 'hot deck with high density of face cards'.

Was he have certainty about outcome from hot deck? Not. Yet increased the bet on a chance.
Say you start to martingale when a pair reach average daily range...is that any different from what Ed Thorp raised his bets on?
No certainty, just the same, however some sort of reversal more likely than not....
there is always, always another trade!!
  • #60
  • Edited 12:53am Oct 19, 2017 12:41am | Edited 12:53am
Quoting yonnie
hi C. must admit I keep a weary eye out for when this bull run in equities will run out and the inevitable crash will happen. the commodities probably will hit rock bottom, so not keen on buying them at their current price. VIX is another matter ofcourse - it will only go up like crazy when a crash happens. out of curiosity: when will VIX be on your list?
Hi Y..I need to become familiar with trading it (or derivatives of it)....so just need to check out a few things first. I am familiar with the historical low volatility of VIX....but uncertain at the moment of the method to trade VIX and if there are associated holding costs....which would dampen my enthusiasm if there are holding costs cause this insane market could keep plugging away like this till kingdom come.

I think R a few weeks back put me onto some brokers who were offering VIX...just need to do some homework first.

If you are concerned about buying commodities right now then do the calc's and look at aggressively averaging into them. Also keep your eye out for brokers who charge no holding costs (like Pepperstone). We could come in now if we calculate our total risk exposure and decide to make the play....but we could be holding them for a while till the ***** hits the fan in the equities...and then there is opportunity cost to consider if you have committed a large portion of your available capital to these trades.

I am yet to make the play myself and probably will be averaging into them as I don't have the balls to commit in total at the moment......as I have the same feel as you that there is probably worse to come..... mind you if we do come in hard now with a calculated position size and are just patient, we will be able to calculate our profit targets and just forget about it. When averaging in to these instruments you might find that you are not fully loaded before you are heading north....and then you have missed the position leverage potential. Nothing worse that a great run with only 1 lot under your belt when it could be say 6 lots now. :-)
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