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Does the martingale system really work?

  • #41
  • Jan 31, 2012 3:02am Jan 31, 2012 3:02am
Hey, I would very much appreciate if anybody could tell me what is wrong with this algo (statement attached). It is basically a martingale but I have no idea myself as I don't own the algo.
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File Type: xls DetailedStatement.xls   887 KB | 1,614 downloads
  • #42
  • Jan 31, 2012 3:45am Jan 31, 2012 3:45am
Quoting One billion
Hey, I would very much appreciate if anybody could tell me what is wrong with this algo (statement attached). It is basically a martingale but I have no idea myself as I don't own the algo.
I wonder who was the broker he traded with? The guy went from $100K to $1.7 million in 9 months.
  • #43
  • Jan 31, 2012 5:26am Jan 31, 2012 5:26am
Quoting One billion
Hey, I would very much appreciate if anybody could tell me what is wrong with this algo (statement attached). It is basically a martingale but I have no idea myself as I don't own the algo.
this is mixed martingale + grid + hedge trading.

no one can say without the code, under what circumstances, what and why is executed....because one can only guess
  • #44
  • Jan 31, 2012 5:34am Jan 31, 2012 5:34am
Quoting ixbone
this is mixed martingale + grid + hedge trading.

no one can say without the code, under what circumstances, what and why is executed....because one can only guess
Thanx anyway. I guess this statement clearly indicates that martingale works. But there also has to be a human factor as somebody has to step in sometimes and which the damn thing off. One options would be to withdraw profit when it is double the initial deposit.
  • #45
  • Jan 31, 2012 5:47am Jan 31, 2012 5:47am
Quoting ixbone

this reduces the executed orders and drawdown massive
Are lot sizes doubled with successive orders?
"Put all your efforts in becoming effortless"
  • #46
  • Jan 31, 2012 6:01am Jan 31, 2012 6:01am
Quoting IamTHAT
Are lot sizes doubled with successive orders?
correct and hedge after the 4th position

example:
buy:
0.1
0.2
0.4
0.8
sum 1.5 lots buy orders
when the last 0.8 buy order is executed, execute a 1.7 lot sell order
diff is now 0.2 sell lots, stop executing new orders (max orders =5)
now you stopping further drawdowns, you have time to decide:
- waiting if the markets is falling further, the hedge sell will equal all buy orders
- waiting and exit at the lowest possible loss on all buy+sell orders
- if the market reverses and is going up, close all at the lowest possible loss

there is no secret of trading martingale - watch the market
if your 1st entry is going 4th martingale, your entry (system) was wrong in general
  • #47
  • Jan 31, 2012 12:54pm Jan 31, 2012 12:54pm
What is the difference between martingale and grid? thank you.
  • #48
  • Jan 31, 2012 1:04pm Jan 31, 2012 1:04pm
Quoting One billion
What is the difference between martingale and grid? thank you.
in general:

grid:
- same steps between orders
- same lot size on each order

martingale:
- same or doubled steps between orders
- doubled lot size at each order
  • #49
  • Jan 31, 2012 1:17pm Jan 31, 2012 1:17pm
Quoting ixbone
in general:

grid:
- same steps between orders
- same lot size on each order

martingale:
- same or doubled steps between orders
- doubled lot size at each order
Thank you. But then how can grid and martingale be included in one trading strategy as the one I disclosed with a statement before? Common sense says that it can be either grid or martingale.
  • #50
  • Jan 31, 2012 2:48pm Jan 31, 2012 2:48pm
- sometimes the steps between the orders are equal, not always
- sometimes the lot size was the same, not always
- rarely a hedge position was seen in the statement (lot < 2)

so the conclusio: it a martingale + grid + hedge strategy, but without the code...no entry signals, no money management, no exit strategy, no emergency strategy, can be clear described.
  • #51
  • Jan 31, 2012 10:46pm Jan 31, 2012 10:46pm
Quoting BBPI_fxtrader
martingale never works unless you have an unlimited account
Unlimited account is not enough, contrary to popular belief. You also need unlimited liquidity which is not possible in any market. Some people claim that the 'big boys must use martingale because they have such large accounts', but what happens when they are deep into the drawdown and they need to get 1bill filled for the next step - they are screwed. It is the same at the casino, at some point you hit the table limit and then what do you do?

Pure martingale can never guarantee profits. Sure, if you start really really small and have a large account then you can design it so that an account blow up is very unlikely to happen in your lifetime (statistically speaking), but then your profits are tiny and you still have the remote chance that the account will blow on the first attempt. No matter what, you are at the whim of luck with a pure martingale system.
  • #52
  • Jan 31, 2012 10:53pm Jan 31, 2012 10:53pm
Quoting Agro
Unlimited account is not enough, contrary to popular belief. You also need unlimited liquidity which is not possible in any market. Some people claim that the 'big boys must use martingale because they have such large accounts', but what happens when they are deep into the drawdown and they need to get 1bill filled for the next step - they are screwed. It is the same at the casino, at some point you hit the table limit and then what do you do?

Pure martingale can never guarantee profits. Sure, if you start really really small and have a...
as usual Agro knows his shit.

my thoughts exactly
AVT INVENIAM VIAM AVT FACIAM
  • #53
  • Feb 1, 2012 2:33am Feb 1, 2012 2:33am
Quoting Agro
Unlimited account is not enough, contrary to popular belief. You also need unlimited liquidity which is not possible in any market. Some people claim that the 'big boys must use martingale because they have such large accounts', but what happens when they are deep into the drawdown and they need to get 1bill filled for the next step - they are screwed. It is the same at the casino, at some point you hit the table limit and then what do you do?

Pure martingale can never guarantee profits. Sure, if you start really really small and have a large...
there is no problem to trade with martingale, as long you walk with some guidelines.

yes casinos have table limits, but forex not!

and yes, the "big boys" trade sometimes with martingale, d'lambert and fibo systems, depends on which bank and back office.

yes pure martingale wipes your account, but not a modified martingale
  • #54
  • Feb 1, 2012 2:45am Feb 1, 2012 2:45am
i think you just proved Agro's point.

yes big boys due use some sort of spiral, martingale, fibo entries PRECISELY because of what Agro said.

if you have 10,000 orders on the ASK and it gets hit with 100,000 on the BID what happens to the market?

you eat up liquidity and if you are the only one selling you get ripped to peaces.

BIG MONEY MASKS its movements, by scaling in.

hence the limit Agro talks about
AVT INVENIAM VIAM AVT FACIAM
  • #55
  • Feb 1, 2012 2:52am Feb 1, 2012 2:52am
Quoting ixbone
there is no problem to trade with martingale, as long you walk with some guidelines.

yes casinos have table limits, but forex not!

and yes, the "big boys" trade sometimes with martingale, d'lambert and fibo systems, depends on which bank and back office.

yes pure martingale wipes your account, but not a modified martingale
Ok, I am not going to argue, if you have created a modified martingale system that controls drawdown then good on you. I will say that these type of strategies are definately not for me. You need an edge to trade forex, pure and simple. And no amount of tinkering with money management strategies is going to provide that edge. Ok, guess I did argue a little.

But the statement you made about forex having 'no table limit' is wrong. It is called a liquidity barrier (or at least that is what I call it). Sooner or later the market will no longer be able to absorb the order size you need to fill. This is why even an unlimited account can't gaurentee success with the pure martingale strategy
  • #56
  • Feb 1, 2012 2:54am Feb 1, 2012 2:54am
Quoting the redlion
i think you just proved Agro's point.

yes big boys due use some sort of spiral, martingale, fibo entries PRECISELY because of what Agro said.

if you have 10,000 orders on the ASK and it gets hit with 100,000 on the BID what happens to the market?

you eat up liquidity and if you are the only one selling you get ripped to peaces.

BIG MONEY MASKS its movements, by scaling in.

hence the limit Agro talks about
He he, beat me to it red
  • #57
  • Feb 1, 2012 3:42am Feb 1, 2012 3:42am
guys we are far away from the thread question...

- original martingale is not useable and not working in forex
- modified martingale is useable and working
  • #58
  • Feb 1, 2012 4:23pm Feb 1, 2012 4:23pm
But let's suppose I want to buy a combined martingale+grid+hedge EA with a good price. Who should I contact and what are the prices?
  • #59
  • Feb 1, 2012 5:13pm Feb 1, 2012 5:13pm
Quoting One billion
But let's suppose I want to buy a combined martingale+grid+hedge EA with a good price. Who should I contact and what are the prices?
Sorry, i dont know, personal i think a martingale+hedge combo is enough, i do not see any advantages to use a grid with martingale+hedge
  • #60
  • Feb 1, 2012 7:41pm Feb 1, 2012 7:41pm
Hi ixbone,

Is your EA from post 38 available?
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