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Martingaling - Looks so good until the inevitable

  • #61
  • Aug 15, 2014 1:11pm Aug 15, 2014 1:11pm
There's a considerable difference between taking countertrend trades and martingaling. Let's not confuse the two.
  • #62
  • Aug 15, 2014 1:14pm Aug 15, 2014 1:14pm
Quoting Proximus
{quote} You are very ignorant dude.I dont care if it works for you, if it does then its fine, good for you, but that doesnt mean that everyone who martingales will be a winner.I saw countless TE's which used martingale also on myfxbook there were plenty, live accounts wiped in less than a month, of course they dont brag about it, only you do, but if you martingale ,then eventually that wipe will come to you aswell, and then you will cry because you lost all your money
So ONLY using martingale is what will wipe out your account? Is that what you are saying?
Banks scalp, why don't you?
  • #63
  • Aug 15, 2014 2:23pm Aug 15, 2014 2:23pm
Quoting Proximus
{quote} You are very ignorant dude.I dont care if it works for you, if it does then its fine, good for you, but that doesnt mean that everyone who martingales will be a winner.I saw countless TE's which used martingale also on myfxbook there were plenty, live accounts wiped in less than a month, of course they dont brag about it, only you do, but if you martingale ,then eventually that wipe will come to you aswell, and then you will cry because you lost all your money

Your entire post history is the "Newbie Meets Market", a journey of ignorance.

I never said all martingales are safe, nor an effective means of trading the market. What I am saying, is that just because you haven't been able to find a way to use them, doesn't mean anything other than the fact that you have been ineffective in your quest and to kindly allow others the opportunity to navigate for themselves.

Spraying stupidity around the forum, as you choose to do, is a sad waste of your time and proves to be more of a detriment to others than will ever be of help.

If you can't do something, either sit back quietly and watch it happen, or try to learn how to make it happen.

Again, there is no need for you to be a dipstick, just for the sake of being a dipstick.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #64
  • Aug 15, 2014 2:26pm Aug 15, 2014 2:26pm
Quoting EnoFX
There's a considerable difference between taking countertrend trades and martingaling. Let's not confuse the two.
Martingaling in trend is referred to as Pyramiding.

Martingaling in counter I choose to consider as Cost Averaging.

A true martingale is to double down on the previous order, not carry all trades.

By definition, I am not sure that I've seen a true "Martingale", strategy as applied to automated nor manual trading...but I have seen the base concept applied in relevance and by concept.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #65
  • Aug 15, 2014 4:22pm Aug 15, 2014 4:22pm
Quoting VaBikePacker
{quote} It's mostly wrapped up right here for me.
Thanks for letting me understood you point of view |
Prachait Saxena
  • #66
  • Aug 15, 2014 5:53pm Aug 15, 2014 5:53pm
Quoting CholiPop
{quote} So ONLY using martingale is what will wipe out your account? Is that what you are saying?
Exactly, its the same as alcoholism, 1 glass of wine might not seem much, but add that up trough the course of your life and later on you wake up with liver problems.

Martingale is the same, double double double and then wake up with no more money to double and there it goes all your money

Quoting Magix
{quote} Your entire post history is the "Newbie Meets Market", a journey of ignorance. I never said all martingales are safe, nor an effective means of trading the market. What I am saying, is that just because you haven't been able to find a way to use them, doesn't mean anything other than the fact that you have been ineffective in your quest and to kindly allow others the opportunity to navigate for themselves. Spraying stupidity around the forum, as you choose to do, is a sad waste of your time and proves to be more of a detriment to others...
I dont want to speak with you anymore
"There's a sucker born every minute" - P.T. Barnum
  • #67
  • Aug 15, 2014 6:32pm Aug 15, 2014 6:32pm
Quoting Proximus
{quote} Exactly, its the same as alcoholism, 1 glass of wine might not seem much, but add that up trough the course of your life and later on you wake up with liver problems. Martingale is the same, double double double and then wake up with no more money to double and there it goes all your money {quote} I dont want to speak with you anymore
Hello Proxi....... I dont know what else to say. Yes if you keep doubling y
our money you will eventually lose all of your money.... Assuming your losses are take much to begin with. Which is why I say it all depends on the system. Look at the member EURUSDD........... Isnīt his system good enough where you wont experience more then 3 losses in a row? If that is true then martingale will work perfectly.

I think we have this unrealistic expectation that we can beat this market in the long term.... Well if you believe that then you are wrong. You wont be able to find more then a hand full of accounts which have been up for more then 24 months, and if you do find it, the account would more then likely have a horrible equity curve.

Our harsh reality is our accounts will eventually be wiped out. If not on the next trade, then in the future... So why not focus on the present.. Make good trades and withdraw as much as you can?
Banks scalp, why don't you?
  • #68
  • Aug 15, 2014 6:32pm Aug 15, 2014 6:32pm
Quoting Proximus
I dont want to speak with you anymore

Simple solution...

Scrawl your stupidity on post it notes and stick them to your monitor.

If you choose to continue rants on subjects that you have no experience or information on, in a public forum, expect to have your ass handed to you...repeatedly.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #69
  • Aug 15, 2014 6:37pm Aug 15, 2014 6:37pm
Quoting Magix
{quote} Your entire post history is the "Newbie Meets Market", a journey of ignorance. I never said all martingales are safe, nor an effective means of trading the market. What I am saying, is that just because you haven't been able to find a way to use them, doesn't mean anything other than the fact that you have been ineffective in your quest and to kindly allow others the opportunity to navigate for themselves. Spraying stupidity around the forum, as you choose to do, is a sad waste of your time and proves to be more of a detriment to others...
Well said. People focus more on martingale not working, instead of the system. I mean if a person had a super accurate system, you wouldnt even need to use martingale. You make your one trade, and thats it. I have seen systems here on ff go 14 times in a row without losing and giving the market less then 10 pips per trade. Yes 10 PIPS. So in that case a person may become over confident and on the 15th trade lose, and on the 16th trade use martingale and get wiped out, but that 16th trade may not of followed the rules, which got the account to where it was in the first place.
I understand that this thread isnīt about systems, and focuses on martingale solely, but martingale is simple money management. Nothing more.
Banks scalp, why don't you?
  • #70
  • Aug 15, 2014 6:45pm Aug 15, 2014 6:45pm
Quoting Razor_trader
What spurred such a topic? I have been following (not subscribing) to a signal provider through MQL5 for at least 4-5 months now after seeing some pretty phenomenal growth figures, coupled with very manageable draw down and who had managed to get a decent following to their services. What provoked my interest further was that it was a Martingale Strategy that had gone on for about 3 years and had over 5000 trades. Pretty good effort really. As you can see from the first screen shot, the equity curve is just beautiful, and it is not a testing, highly...
Being a mailman with a walking route, I get to basically think all day about crap.

What started this whole discussion was the charts of the Martingale strategy that had grown from $1,000 to $125,000 in three years. This performance is outstanding. Were this to be a live account (I think it shows as a demo for purposes of showing past performance to potential signal subscribers), he would have been playing with house money for a substantial period of time. Naturally, the strategist is clearly fucking things up at this point in time, and the signal subscribers who hopped on board shortly before that huge dip are probably slightly ticked. But even assuming the dumbass closed out every jacked up order at this point in time, it would still be a fantastic performance -- $1,000 to something like $65,000 in 3 years time; that's nothing short of huge. That being said, I think I lack sufficient information to determine whether this is a startling example of how Martingale can fail or just plain strategist ineptness (e.g., having open trades in correlated pairs, both of which experienced the same adverse movement; overexposure to the market due to overconfidence, etc).

I am a grown adult with a brain and with the ability to do my own due diligence and research upon any given trading strategy and think critically. I, for one, know that I understand Martingale, know the risks of utilizing Martingale or forms of it in any trading system, and don't really need to be acquainted with its pitfalls. I don't personally use pure Martingale and probably never will, but that doesn't mean that I can't see how a form of Martingale can be used with stops or drawdown limits in a manner that is profitable over a period of time. I think to assert otherwise is crap, and I think that there are EA's out there that prove this.

What I am sensing from certain folks (not pointing fingers) is what I've sensed from every trader who used to work in a brokerage of one kind or another or in a similar institution or is of a similar mindset. They are puzzled and upset by retail traders -- the so-called "outliers" -- who in a short period of time are besting the "pros" by some measure without doing things the old school way. The vast majority of stock brokers can't even beat broad market performance; why would I want to listen to some old crone broker's pitch about "Well, that's not how you want to do things ... ." They suck.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #71
  • Aug 15, 2014 9:14pm Aug 15, 2014 9:14pm
To me trading is a simple game of playing the odds when they're slightly in my favour. Martingale doesn't fit that definition for me but that doesn't mean it won't for someone else.
  • #72
  • Aug 15, 2014 9:15pm Aug 15, 2014 9:15pm
In order for it to be martingale, you have to post the loss and then put in a larger bid going in the same direction, as I understand it. If you do not post the loss, all you are doing is increasing your bet in a position you are confident of winning. If you pick a good long-term trend, and do not overextend yourself, you will profit.

If I read his history correctly, that is how Nomura got his start. (Now, one of the biggest brokerages in the world).

Calling the long term trend correctly and sticking with it is the way many traders have made their fortunes. Call the long term incorrectly, well..

Overextend your position, well...

Eliminate these two common mistakes and it is hard not to win.
  • #73
  • Aug 15, 2014 9:26pm Aug 15, 2014 9:26pm
Quoting CholiPop
{quote} Hello Proxi....... I dont know what else to say. Yes if you keep doubling y our money you will eventually lose all of your money.... Assuming your losses are take much to begin with. Which is why I say it all depends on the system. Look at the member EURUSDD........... Isnīt his system good enough where you wont experience more then 3 losses in a row? If that is true then martingale will work perfectly. I think we have this unrealistic expectation that we can beat this market in the long term.... Well if you believe that then you are wrong....
Thats funny because i know atleast 3 guys who are in the business for over 6 years, of course they dont aim for huge returns, they average about 50-60%/year but they are fund managers and dont have more than 4% DD on their equity.

Their method is conservative and it works, i would trade in the same way like them if i`d have no other choice, but i`m just too greedy and 50%/year doesnt really satisfy me.

Sorry its just greed
"There's a sucker born every minute" - P.T. Barnum
  • #74
  • Aug 15, 2014 9:54pm Aug 15, 2014 9:54pm
What is there to discuss? it's a stupid thing to do.
  • #75
  • Aug 15, 2014 10:12pm Aug 15, 2014 10:12pm
Quoting Rap Skallion
In order for it to be martingale, you have to post the loss and then put in a larger bid going in the same direction, as I understand it. If you do not post the loss, all you are doing is increasing your bet in a position you are confident of winning. If you pick a good long-term trend, and do not overextend yourself, you will profit. If I read his history correctly, that is how Nomura got his start. (Now, one of the biggest brokerages in the world). Calling the long term trend correctly and sticking with it is the way many traders have made...
Kinda....

What if a subsequent position was played in the same direction that doubled the original lot size in a same set manner, without posting the loss, but with the same expectation for gain...this actually qualifies as the same thing, just played a different way.

If your first position was a single lot, and your second position was a single lot, it would effectively have doubled your first position, without actually posting the loss.

From there, you could add 2, 4, 8, 16 to the primary position on a set strategy, and it too would still be the same idea behind martingale, only would carry a floating loss instead of an absolute loss.

The Martingale was created around simplistic gambling, roulette and or blackjack. With the theory that doubling your previous wager on the following hands, would eventually see you square up loss and turn a profit. These games, won't allow you to carry a floating loss, market however is different and thus the adaptation of the martingale strategy.

Holding for the home runs or majors, isn't typically what you will find and see in an active traders forum. Sure, there are the odd folk who hold on swings or will set hundreds of pips for profit lines, but a lot more of what you will see is strategies based on shorter ranges, for smaller size movements. In both of these, we can still find the loose adaptation of the martingale strategy based on cost averaging. Maybe the lot increment isn't as what was previously posted, but the idea is still the same.

The same questions always remain...

When do you add a position?
What size position do you add?
and
When do you cash in your chips, win or lose?

By definition, profit is the first fraction of a pip above your original spread that covers any commissions or swap fees. Some place between this profit and doubling the account is where those who struggle with market, typically get lost.

If you define a reasonable profit target, have a reasonable sense of direction and cost average in a size that your account can afford, your chances of success can increase, with each subsequent position...if not, to just minimize the losses accumulated.

The idea of cost averaging or through the use of an evolved martingale strategy, makes sense...

The idea of a blind add as you would find in a casino...not so much.

Understanding the difference between both of these is what can lead to your success in these strategies.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #76
  • Aug 16, 2014 5:34am Aug 16, 2014 5:34am
What are the chances that the price will hit your SL 4x in a row...I mean you go with the trend, ok...You go long 1 lot and put a sl and tp. Your sl is hit.. You reverse and go short 2 lots...your sl is hit. Ok, 3rd is the lucky charm, you go long again with 4 lots...your sl is hit. At this point why don't you back a little and realise that you're picking tops to buy and bottoms to sell in a channel or some consolidation period, instead of blindly martingaling to a failure... I see it like that...i have a hard time realizing that your sl would be hit in a first place if it's positioned nicely and you picked the trend trading... Wouldn't martingale, even in it's pure form of just doubling the lots, help you there..

I'm curious...search for William Greenspan and his day trading video on youtube...he was a pit trader trading futures with pivot point system..i don't know what minute of the video is that when he is saying that after the price hits his sl, he opens another trade in opposite direction with double the position...he had more than 130 consecutive winning months..you can't argue there
  • #77
  • Aug 16, 2014 8:00am Aug 16, 2014 8:00am
Quoting merquise
What are the chances that the price will hit your SL 4x in a row...I mean you go with the trend, ok...You go long 1 lot and put a sl and tp. Your sl is hit.. You reverse and go short 2 lots...your sl is hit. Ok, 3rd is the lucky charm, you go long again with 4 lots...your sl is hit. At this point why don't you back a little and realise that you're picking tops to buy and bottoms to sell in a channel or some consolidation period, instead of blindly martingaling to a failure... I see it like that...i have a hard time realizing that your sl would be...
You can`t generalize the SL..... As the `trend`is a 100% subjective topic. Plus what if a person is scalping using a sl of 5 pips, instead that of a trend trader who can use sl of 200 pips or even higher.
Banks scalp, why don't you?
  • #78
  • Aug 16, 2014 8:17am Aug 16, 2014 8:17am
If you use solid price action principles incorporated with Martingale system, then you have a chance.

However, for most traders, especially newbies, I would stay away from this. Almost every trader I have ever known who consistently incorporated some form of Martingale system was inevitably required to refund their account.

And I guarantee you for every trading story boasting of increasing a $1000 account to $50k, there are a hundred others who went bust using Martingale. People tend to only report when they win.

The problem with using a martingale FX strategy compared to the Black Jack table is that FX requires substantial leverage. Understanding when/how to manage your risk reward ratios (1 to 1, 1 to 2, 1 to 3 etc....) is much safer than Martingaling things. Especially if your strategy involves adding to losing positions.

So if you employee these techniques, you had better understand and study the mathematics / probability supporting it.

Me.... I use PA to increase my odds and of a successful trade. Much safer and i sleep at night....no waking up to check charts at 3 AM hoping my position turned green.

Cheers
  • #79
  • Aug 16, 2014 8:22am Aug 16, 2014 8:22am
Quoting CholiPop
{quote} You can`t generalize the SL..... As the `trend`is a 100% subjective topic. Plus what if a person is scalping using a sl of 5 pips, instead that of a trend trader who can use sl of 200 pips or even higher.
With scalping I wouldn't use Martingale at all..maybe some form of re-averaging but pure martingale, no...
  • #80
  • Aug 16, 2014 8:25am Aug 16, 2014 8:25am
Quoting merquise
{quote} With scalping I wouldn't use Martingale at all..maybe some form of re-averaging but pure martingale, no...
Why not? Assuming those who scalp do so because they seek or have a system that uses accurate entries, martingale should be perfect for scalping.
Banks scalp, why don't you?
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