Demo Trading, Martingales, and Real Trading

Well title says it all

if you have been demo trading and martingling thinking it works. Pull back the scope, put in a 1000 pip movement against you...hold it there for 2 years. See where you are at. Then start trading for real.

No real fund manager martingles. Cost averaging yes.. ppl do that. but in a different context than what has been preached here.

Ppl do VWAP or TWAP orders throughout a day.. maybe max a week if there is low liquidity in certain stocks. but never in Forex. you can get done probably in a couple hours.

If the price is moving away from you, what makes you think it is coming back? why not move against you more? At any point in time, the probability of it turning up or down is 50/50. Even if the tick previously is up, the next tick is still 50/50 up or down. it is an independent event.

If you are so naive to believe that, hey if it goes up then its coming down and I can exploit it, think again. If it is that easy, ppl like Demo Man would have been a millionaire by now..which of course he is not ( he can barely fund his account to 10k for a trade off) If you can find an edge, then your edge must be explainable fundamentally. If you really think there is an edge, you dont need any form of money manipulation/management. Just risk 1% of your capital on each trade and take the profit your set.

Again demo traders come and go, preaching little they know. Well yes martingling these days probably has a higher survival rate due to the fact that vol is at its lowest in years. If cost averaging is what you want, setup a certain specific timeframe for it. If it goes against you, you close as you initially

Takes a man to close a trade when it hits his stop loss. Takes a sucker to keep putting money on the wrong horse. Ever heard about gambling? No gambler would say he ever has a problem. No gambler likes to lose and no gambler ever feels like losing.

The point is, the market is the market. You have to learn how to take and give. If you cant find an edge, do something else. Nothing to be ashamed of.

But point in fact, someone in forum talks big but unfortunately has never been in the industry other than martingling on his demo. Weird but living in his own world.

Why am I posting this? Because 1 thing pisses me off more than others. When stupidity preaches stupidity and no one stops the stupidity. Its like a one eye man leading a blind kingdom... he and his circle of *ahem* internet friends and his ego. Pathetic.

Well one thing for sure. You dont need more debates on this. If martingle works, it would never be seen or heard for so many years on forum. When ever did anyone that made money consistently ever let it on, on the INTERNET.


Oh btw, that load of bullshit dynamic range bla bla bla... LMAO.. using some sort of historical data to predict future , been used and done by many.. Does it work any better than just simple technical analysis? You be the judge of it.

Real trading means,

1) you found an edge that can be explained .
2) It is consistent
3) Simple but not stupidly simple. Else everyone is doing it
4) you can sleep well knowing it wont blow up given your risk is 1% as you know, you can never know whats gonna happen ( I mean world war 3, nuclear, force majeur situations)
5) If you hit your risk limits, you are to stop the trades. No reloading and shit because in the real world, who's gonnna fund ya new money?
6) Scalable (important if you wanna make it big)


Will add more when I have time

There are some people who advocates martingle as an advanced money management technique.

Well for example, if you have multiple income streams. ie a job, some dividends from stocks, a healthy bank balance that pays some interest, and as a hobby would like to trade 0.01 lots just for kicks and you know you have liquid assets to tide through 1-2k pip movements against you, yea martingle makes some sense if you keep yourself nimble enough..Probably you can make 5-10% a year on a small sum. But will this give you financial freedom/independence? Nope

Why martingle never works on a big account? When sums get too big, you mind gets clouded. Or you capital runs out.

I have a specific no-loss portfolio making 10% a year on a small sum which I have no worries about. Never taken a loss.. But in the end it is just that. Nothing more. something churning $500 dollars a year. With capital of 50x$5000 committed at multiple points of the lifespan of the account.

I have some portfolio which I take profits and loss. Draws never exceed 10% and I still made 10-20% a year on a sum which can grow as I limit the risk of each trade to 1% of capital.

I'm not sure what your intention is with regard to the last two paragraphs, however I'm sure most people understand the flaws in the martingale probability theory. If others can stomach the high risk that they'll blow up their accounts by employing it as a money management strategy I say good luck to them and would like to hear of any success.

It seems interesting that in the realm of forex trading - the allure of which is high leverage, high volatility and high liquidity - anyone would be willing to risk their hard earned capital for such limited returns. By risking 1% of initial capital on a trade using the martingale system it would take only 6 consecutive losses to make the losses unrecoverable without injecting more capital. By the third trade (very much a probability that a trader will have at least 2 consecutive losses) the punter is now risking 4% of initial capital for a potential 1% gain. That is attrocious R:R by anyone's definition.

That being said, applied to a high frequency automatic trading system risking 0.001% on each initial trade... But who has the time or energy to look into that?

The irony about martingale is that there are easier, not mention safer, ways to trade.

Totally Agree EnoFX.

Well the irony of martingle is, no matter what you do, without ALOT of capital and trading for VERY SMALL gains. You arent going to be able to make enough.

A trader typically trades 30 billion over the course of a year and make around 0.3% roughly 90mil (this is an average to above average trader).

Unless you have that much.. you arent going to survive on martingling..

Noobs like Magix doenst even know what martingle trading is because they blow up with their limited capital all the time.