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Martingale EA Discussion

  • #21
  • Feb 21, 2011 7:20am Feb 21, 2011 7:20am
Quoting Alan5616
I was using a counter trending Martingale EA for many months, until fairly recently. After taking a couple of big losses that went beyond Level 7, I lost my enthusiasm for the principle. The more pairs you trade; the more money you will make. However, the more pairs you trade, the greater the chance that one of them will turn around and bite you.

I still believe that such a system can be profitable but, have never been able to come up with a solution to counteract the potential death trade(s).
Alan, the level of the martingale system must be carefully calculated.
For example if in the last ten years your system never reachs lvl 10, then you should only run a live account that can hold until lvl12.
The bad thing is that a martingale system that can hold until lvl10 will start with 0.01 lots, and you need really high ammount of trades per day to make it profiteable.
  • #22
  • Feb 21, 2011 9:51am Feb 21, 2011 9:51am
Quoting akukaya
Good, seems some still test theirs martingale system...

To me, although martingale system may seem dangerous to some, but it is still fun to test and can build a lot of creative ideas on your way to find solution for death trade avoidance.

I dont think one need...
Would you share your EA with us?!

Thanks
  • #23
  • Feb 21, 2011 10:38am Feb 21, 2011 10:38am
yes, may be after my complete live test.

have u seen the latest results?

any comment, pls post it into myfxbook

http://www.myfxbook.com/members/akuk...kaya2011/87361
  • #24
  • Feb 21, 2011 4:28pm Feb 21, 2011 4:28pm
Quoting trucheitor
Alan, the level of the martingale system must be carefully calculated.
For example if in the last ten years your system never reachs lvl 10, then you should only run a live account that can hold until lvl12.
The bad thing is that a martingale system that can hold until lvl10 will start with 0.01 lots, and you need really high ammount of trades per day to make it profiteable.

Starting with 0.01 lots as first trade you need $10 as margin regardless of actual size between the levels. By the eleventh level you have $20,470 tied up as margin. The 12th level requires an additional $20,480 for margin. Assuming you have this amount in your account and win this trade you make $10 (less if the levels are not upto 100 pips! apart) Congratulations your have just won 0.02% of your account.

Lets look at it another way. You need to win straight 4,096 sequence of trades to double your account. Did you say your system made 44 trades in 10 years? with losses??

Remember, we are just calculating the provision you need to make for Level 12 trade which guarantees???? no loss. We are not adding actual losses during the trades themselves. JUST MARGIN REQUIREMENT!

Martingale... hm...

King.
  • #25
  • Feb 22, 2011 2:50am Feb 22, 2011 2:50am
Quoting trucheitor
Alan, the level of the martingale system must be carefully calculated.
For example if in the last ten years your system never reachs lvl 10, then you should only run a live account that can hold until lvl12.
The bad thing is that a martingale system that can hold until lvl10 will start with 0.01 lots, and you need really high ammount of trades per day to make it profiteable.
Starting with 0.01, trading 16 pairs, it's possible to make $100+ per day. I was using a range of 25 pips with a TP of 25-30. The downside is that, if a strong intra day trend develops, without a 25 pt retrace, then I would have to risk over $1,000 to make $2.50. Not an attractive proposition.

Just because a pair hasn't had a day when it went more than L10, over a 10 year period, doesn't mean that, tomorrow, it won't happen.

The one thing I've learnt trading forex is that if something can happen,
which is just about the worst case scenario, it will happen.
  • #26
  • Feb 22, 2011 3:49am Feb 22, 2011 3:49am
Quoting Alan5616
Starting with 0.01, trading 16 pairs, it's possible to make $100+ per day. I was using a range of 25 pips with a TP of 25-30. The downside is that, if a strong intra day trend develops, without a 25 pt retrace, then I would have to risk over $1,000 to make $2.50. Not an attractive proposition.

Just because a pair hasn't had a day when it went more than L10, over a 10 year period, doesn't mean that, tomorrow, it won't happen.

The one thing I've learnt trading forex is that if something can happen,
which is just about the worst case scenario,...

Haha, try search 90/10 rules by Steven Covey presentation...
apply this into Forex EA...quite true..

10% is what we cannot control
90% is depends on our actions depends on situation...

nice presentation from Steven Covey that good to practice for a better life...

p/s: Yahoo..see my Akukaya2011 Ea performance in myfxbook

4 days results so far..
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  • #27
  • Feb 22, 2011 7:39am Feb 22, 2011 7:39am
Quoting kingsurfer
Did you say your system made 44 trades in 10 years? with losses??
King.
Hi king!
Yes, but i am a programmer, i can have 3 systems done in the same week, i am walking in the street, something comes to my head and when i am at home it program it and test it.
That system that makes 40 wins and 4 losses is a price action system, it seeks for good pinbars and the operate them.
The problem is that it works good in GBP/USD but it makes no money in ten years in EUR/USD, because if it worked well in all pairs then i would use martingale in it and operate in 10 pairs for example and make 440 trades in ten years and with martingale it would be a great system, but it doesnt work in all pairs.
  • #28
  • Feb 22, 2011 9:27am Feb 22, 2011 9:27am
Quoting trucheitor
Hi king!
Yes, but i am a programmer, i can have 3 systems done in the same week, i am walking in the street, something comes to my head and when i am at home it program it and test it.
That system that makes 40 wins and 4 losses is a price action system, it seeks for good pinbars and the operate them.
The problem is that it works good in GBP/USD but it makes no money in ten years in EUR/USD, because if it worked well in all pairs then i would use martingale in it and operate in 10 pairs for example and make 440 trades in ten years and with martingale...
If a system is good, its good. Martingale adds an unnecessary complication. Trade the system as it is.
  • #29
  • Feb 22, 2011 5:29pm Feb 22, 2011 5:29pm
What do you people think about martingale-like money management applied to discretionary trading?
  • #30
  • Feb 22, 2011 7:34pm Feb 22, 2011 7:34pm
I have to admit, when I hear martingale it just makes me think like there is still a hope... I mean let's face it martingale is 100% wining so it is the holy grail for a while.... but when it stops being the holy grail it becomes the worst nightmare, if it losses just once.

How can you stop the death trade, or how can you avoid the side movement of the market (consolidating) in my case, and I will not have to worry about money NEVER in my life. It is just like I would win the lottery or even better.

Now What is easier..... win the megamillion or powerball lottery or avoid the death trade in a martingale system? The result is the same anyway..... never worry about money and leave life like it suppose to be lived....
  • #31
  • Feb 22, 2011 11:37pm Feb 22, 2011 11:37pm
Quoting iulli
I have to admit, when I hear martingale it just makes me think like there is still a hope... I mean let's face it martingale is 100% wining so it is the holy grail for a while.... but when it stops being the holy grail it becomes the worst nightmare, if it losses just once.

How can you stop the death trade, or how can you avoid the side movement of the market (consolidating) in my case, and I will not have to worry about money NEVER in my life. It is just like I would win the lottery or even better.

Now What is easier..... win the megamillion...
If you cannot see the different, very bad...

Try to think out of box, not the normal martingale style that many people talk negative about..see the positive and potential of it..tweak, play, read, yes, many efforts needed but it is fun even if it blow the account later, never mind for small affordable loss with hugh potential right?

it is insane to do the same thing again and again but expecting a different results...when you tweak it, it is not the same thing anymore...let's think about it...

You need thinking and learning to create a better system.. for lottery, no thinking needed...

my 2 cents
  • #32
  • Feb 23, 2011 10:03am Feb 23, 2011 10:03am
Onada is now offering a practice account where you can open 0.0001 lots if you want (the same they have been offering in the web platform), BUT now they support MT4!! (practice for one or two weeks).

Yes! we can now test a system starting with 0.0001 lots and can hold about 13 levels and just be opening less than 2 lots.
Ofcourse we would need a great number of trades to make some money out of it, and that huge ammount of trades higher the possibilities of reach lvl13.
  • #33
  • Feb 23, 2011 10:15am Feb 23, 2011 10:15am
With 0.0001 lots, level 14 is 0.8192 lots (Oanda will support MT4)

Can we hold that lvl14 with the margin needed with a $250 account?

If the answer is yes, then we need a system that can open about 1000 trades per day including all pairs.

So with 0.0001 lots we would win $0.001 per trade...

$0.001 x 1000 trades per day = $1 per day or something like $260 per year.

We can double the $250 account in a year, its not much but this may be a starting point for future improvement of the system.
The next year, as we have the double of the money we can work with other starting lot size.

Please help me to analyse if this can work.
  • #34
  • Feb 23, 2011 4:06pm Feb 23, 2011 4:06pm
Quoting trucheitor
With 0.0001 lots, level 14 is 0.8192 lots (Oanda will support MT4)

Can we hold that lvl14 with the margin needed with a $250 account?

If the answer is yes, then we need a system that can open about 1000 trades per day including all pairs.

So with 0.0001 lots we would win $0.001 per trade...

$0.001 x 1000 trades per day = $1 per day or something like $260 per year.

We can double the $250 account in a year, its not much but this may be a starting point for future improvement of the system.
The next year, as we have the double of the money...
@ Trucheitor

You still need to place the 14th trade so your requirement is $1,638.40 .
Making $0.001 per trade actually means a completed trade sequence that ended with a win. Even if it reached level 10- it's still one trade. You need to make this complete sequence every time you win for 16,384 times without any loss.

Trading multiple pairs reduces the total amount available for each pair if e.g. one pair reaches level 8,then another 2 at level 6. You might not be able to hold a more difficult trade to say level 12. And you know what--U are very likely to "do something" long before this time. This loss does not blow account but may take off 5,000 previous wins and eat into original fund. I have a feeling it may threaten more than once before you make 16,384 completed sequence of trades.

My friend in forex, leave Mr Martingale alone. He is the royal heir to exponential connections in high places. Only one man till date is known to have done battle with him and survived to tell the story. Alas, the man ran away in the middle of the battle! (Guess who that was?).

King.
  • #35
  • Feb 26, 2011 3:17am Feb 26, 2011 3:17am
Quoting Alan5616
I was using a counter trending Martingale EA for many months, until fairly recently. After taking a couple of big losses that went beyond Level 7, I lost my enthusiasm for the principle. The more pairs you trade; the more money you will make. However, the more pairs you trade, the greater the chance that one of them will turn around and bite you.

I still believe that such a system can be profitable but, have never been able to come up with a solution to counteract the potential death trade(s).
Straight martingale is not advisable, unless under a very predictable sideways market. But if it were always.

More conservative dollar cost averaging methods combined with compounding is the best way (from my point of view) to push your winners for consistent profitability. And you can always


To trade more "trendy" pairs, such as EURUSD, you need a way cut out part of the trend. Like a way to wait for xx.x pips first, then start your averaging.
Measure trends automatically with zero lag
  • #36
  • Feb 26, 2011 3:26am Feb 26, 2011 3:26am
Quoting trucheitor
Hi king!
.......
That system that makes 40 wins and 4 losses is a price action system, it seeks for good pinbars and the operate them.
The problem is that it works good in GBP/USD but it makes no money in ten years in EUR/USD, because if it worked well in all pairs then i would use martingale in it and operate in 10 pairs for example and make 440 trades in ten years and with martingale it would be a great system, but it doesnt work in all pairs.
Any good system needs to have multiple adjustable parameters so that they can be adjusted for each currency pair. EurUSD trends differently than GBP/USD and other pairs.

Price action is certainly a good filter. But other parameters need to be tweaked. I mentioned earlier the importance of compounding. You are not pushing your winners enough.
Measure trends automatically with zero lag
  • #37
  • Feb 26, 2011 4:00am Feb 26, 2011 4:00am
Quoting iulli
I have to admit, when I hear martingale it just makes me think like there is still a hope... I mean let's face it martingale is 100% wining so it is the holy grail for a while.... but when it stops being the holy grail it becomes the worst nightmare, if it losses just once.

How can you stop the death trade, or how can you avoid the side movement of the market (consolidating) in my case, and I will not have to worry about money NEVER in my life. It is just like I would win the lottery or even better.

Now What is easier..... win the megamillion...
Nothing to fear but fear itself.

One way to avoid the "death trade" is to not have such an aggressive dollar cost averaging. Consider more of a pillar strategy. Add the same size lots and increase the lot size as needed.

Also awareness of price action is key. One thing that is certain is that the market must eventually reverse. But when don't know when it will trend or for how long. There is a way to "cut out the trend" Wait for the market to move xx.x pips as a filter before you enter the market. Then take your chances.

One good thing about a grid trading type of system (or grid entry), is that you can work out all of the numbers in the spreadsheet ahead of time to get a good idea of the maximum risk and tolerance you are willing to take, given xxx pip price movement from initial entry.
Measure trends automatically with zero lag
  • #38
  • Feb 26, 2011 4:05am Feb 26, 2011 4:05am
Quoting akukaya
If you cannot see the different, very bad...

Try to think out of box, not the normal martingale style that many people talk negative about..see the positive and potential of it..tweak, play, read, yes, many efforts needed but it is fun even if it blow the account later, never mind for small affordable loss with hugh potential right?

it is insane to do the same thing again and again but expecting a different results...when you tweak it, it is not the same thing anymore...let's think about it...

You need thinking and learning to create a better...
+1. I hope my suggestions make better sense of the idea. Watch the market price action until you can find something 100% true about the market. I already gave you one that i obverved.
Measure trends automatically with zero lag
  • #39
  • Feb 26, 2011 8:51am Feb 26, 2011 8:51am
when you use a math system like martingale. use math to get you out of trouble as well.

you need to have a good recovery system. when you figure that out. then this can be very succesfull.

but most people only focus on entries.

i just ask you. what will you do when you are -100. how will you fix this?

in my opinion, if you can answer that, you can fix the martingale or any system that is based on math.
  • #40
  • Mar 3, 2011 6:00pm Mar 3, 2011 6:00pm
Quoting ybfjax
More conservative dollar cost averaging methods combined with compounding is the best way (from my point of view) to push your winners for consistent profitability.
Can you please give an example?
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