Martingale EA. Almost can't lose!

I'm sure this system is floating around in here somewhere. I just can't seem to find it. With all you genius programmers out there I'm sure someone has done it or knows how to do it.

This system is very simple. It uses a martigale style strategy by incrementally increasing lot sizes. It can be random entry or indicator initiated.
A long/short position is entered and when the market goes against your position you enter a position the other direction with double the previous lot entry.
If the market then turns against you again, you do the same thing, enter a position the other direction double the last lot size increment.

I figured a standard 10 TP and 10 SL would work well considering your doubling lot sizes. According to my math with standard 10/10 settings. You could go 11 trades into a progression, with a $1000 account starting at .1 lot size before you get a margin call
You could go 15 trades into a progression, with a $1000 account starting at .01 lot size before you get a margin call.
Odds are you will not range within 10 pips for 11-15 trade reversals.

As long as you keep entering trades in the market direction(and have enough money) you can't lose. I would like an EA built to do this. I'm sure someones probably already thought of it and/or built it.

Any ideas or comments feel free. I think that is the best thing about open source communication. Someone will always think of something you didn't.!

Jar ,

Sorry. The numbers I just posted are incorrect. With a 10tp/10sl you are just breaking even when you double the lot sizes. You would have to either
A- Shrink the SL
B- Increase the TP
c- Increase the lot multiplier

Heres an illustration for us visual learners!
In this the SL is 10 but the TP is 20

Market @ 1.8130 buy 1 lot 20tp/10sl
market @ 1.8120 sell 2 lots 20tp/10sl
market @ 1.8130 buy 4 lots 20tp/10sl
market @ 1.8120 sell 8 lots 20tp/10sl
market @ 1.8130 buy 16 lots 20tp/10sl

Finally the market quits ranging
market moved 30 pips south.

market @ 1.8120 sell 32 lots 20tp/10sl
market @ 1.8100 close position

Order 1 10 pip SL * 1 lot -10
order 2 10 pip SL * 2 lots -20
order 3 10 pip SL * 4 lots -40
order 4 10 pip SL * 8 lots -80
order 5 10 pip SL * 16 lots -160
order 6 20 pip TP * 32 lots 640
-------------------------------------
total 330 pips in six trades with only 30 pips of movement.

It always look good in theory...
You forgot to include the spread!

What if you loose more than 10 trades:
1,2,4,8,16,32,64,128,256,512,1024,2048,etc...

What brooker will take 2048 lots in order?
Up to 128 is not to bad, after it get complicated...

In the example above yes. I was hoping to code in the program where the spread is included in the difference. So if you were trading USDGBP. You figure the spread(my broker is 4). So the TP would be 20 and the SP 10 on every trade. But you initialize the position 4 pips off. So if your buys were on 1.8110, your sells would be on 1.8104. I'm still calculating but I think it would work!!

Start out you progression at .1 lots. That would allow you some more head room.

Look at this,
The thing is, if you never loose its ok, but when you do, the amount you loose double each time, and with only 0.01 (1cents) lots size you get pretty big amount, in short period of time...

In 15 trade you get 1966$ in loosing trade, just by using 1cents lots size...
Because you must add you loosing trade together...

Ps.: Maybe i made a mistake but i dont think so...

So it would be better to stop after 10 trades and begin again.
after 10 you stop, ~61. if you loose again 10 then you lost ~122$ not $+1000$

So you would need 2 times a serie of 10 wins , for each serie 10 lost ( Ratio 2:1 )
I use a serie of 10 but you can lower that for exemple....

So in faq it represent the 10/20 you use for your SL/TP...

So again, if we push further:
You look at a currency, and you take the daily average! lets 80pip for EURUSD.

So in theory, it should not do more than 80 pip a day...
If you use 10/20 then 80/10 lets say 9 it would not do more than 9 lost of 10 pips!!!!!

Everyday you get retracement of at least 10 pips... So in theory it should give 10 pips winners minimum a day....

But the thing is, it apply only if go one way? You alwasy sell or always buy...
If you change you direction then you could do a lot more than 9 time...

If you add everytime(Buy when EUR is short) then you will at some point have a retracement... But if you turn each time you lost... You could do this for a long period of time without wins...

I dont know if you fallow me on this.... ;-)

Even if you start with 0.1 lot it doesn't work. after 10 losses in a raw you will end up with more than 200 lots ! I let you figure out what your capital should be to open 200 lots.
Anyway there are plenty of different versions of martingale Ea in the forum and it is also the prefered EA for crooks to sell it to newbies.
Because it looks good on the statement for some days/weeks/maybe even months if you are lucky and have a very large capital but it always ends the same way: the account is wipped out

Just my advice: don't spend too much time trying to work on a martingale EA. If it would work, we would all be billionnaires. There are plenty of strategies in this forum that are much more interesting to study and to understand.

I agree, just new trader try this.... :-)

iI think this system already exists and is proffitable only with big news events you lose if you are on the wrong side of the market the system is called dealer lot management (DLMV) you can find everything here { Link Removed, rule #2}

gr. leon

Well I agree with alot of the logic you are saying. You don't want large drawdowns or losses and by nature a martingale style strategy is more risky than a standard entry indicator or price action system.

I have back tested this method over 2 weeks. During that time i never made it to ten trades. The highest I made it in the progression was 7, and that was only once. That was on the 1 minute chart. I know that 2 weeks is no way to measure the market but its a lot of action on the 1 minute chart. And during that time it was both ranging and trending. And it still made money. I'm working on an updated backtest and will post the results as soon as they are completed.

When you look at the logic behind the theory in trade. The price must range within 50 pips moving at least 20 pips but no more than 40 (depending on entry position)at least ten times for a margin call. I could maybe see that happening in a non-volitile/low-volume pair. But in GBPUSD, EURUSD, or the USDCHF, I have a hard time seeing that as possible.

Another option is not closing the trades when they go against you incase they reverse you get an additional boost to your equity. Granted it won't offset all of your previous positions as you know the last position is what makes it profitable, but it could help with minimizing drawdowns.

Either way you look at it I don't see there being a better way to hedge a position profitably if you are going to trade an indicator and use this as back up, or go off of a MA to determine initial entry. I haven't been trading long (almost two years) so I may still be considered a newbie, but I still haven't seen enough information to disqualify this a profitable means of trading.

I'm still working on other options for the system, such as profitable settings for the Fibonacci sequence or other lot multipliers.
Does anyone have any hard results from testing, Or some code to play with to test?

There are several martingale systems already developed for forex and I have done quite a bit of forward and backtesting of these systems. What kills you is being on the wrong side of a trending market. A Micro account starting out at .01 grows to $2500 at 10 trades (say 150 pips at 10 increments at 15 pips per increment)... these kind of moves happen all the time.

There are people that trade these strategies successfully but a word to the wise.. OVER LEVERAGE.... OVER LEVERAGE.... OVER LEVERAGE....

Recommend NZD/JPY for consideration. It's volatile and margin is only $1.72 per nanolot ($1000 contract) with FXSol....

The margin requirement with this pair is 2/5 cable's.

Why would it matter if you are on the wrong side of the market? His strategy is a stop and reverse system.... not a single direction.

The secret in the sauce is the hedge.... which absolutely manages risk.... that you never close any contracts..... thus ALL contracts opened in the winning direction will gain 20 pips.

In this chart, the eventual winning trade is Long 18..... notice I did not double on the losers (1, 2, 4, 8...) instead the hedge allows for (1, 2, 3, 5, 7, 12....)

The winning trade will have a total of 29 contracts that make 20 pips (580 pips) and a total loss of 570 (19 x 30 pips). Net gain: 10 pips.

Wrap your mind around this one... it's the most conservative martigale possible.

As the price ranges between 20 pips on either side of the range, the negative equity of losing contracts is offset by the opposite hedge. The drawdown is very well contained. The worst drawdown possible in this graph is (-10 x 29) = -290, occuring if the price reversed 10 pips from the final entry. This trap might have potential. What do you guys think?

How many pips did your broker make in all of this?