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No Loss Martingale Strategy

  • #21
  • Sep 16, 2015 2:16am Sep 16, 2015 2:16am
I have written a program to see how martingale goes with a random buy/sell action and ability to continue martingale up to 9th trade, I believe it will work as no loss if we make actions smart.
try it!

btw: the actions are completely random, and as you know the probability of loss in 9 frequent trade is 1 / 2^9 = 1/512
Attached File(s)
File Type: zip Martingale.zip   10 KB | 1,804 downloads
  • #22
  • Sep 16, 2015 2:29am Sep 16, 2015 2:29am
No loss Martingale is an oximoran...It might work for some time, and then you loose it all in one trade...
Ever heard of the black swan?
You better google that...
  • #23
  • Sep 16, 2015 2:33am Sep 16, 2015 2:33am
Quoting cuchuflito
No loss Martingale is an oximoran...It might work for some time, and then you loose it all in one trade... Ever heard of the black swan? You better google that...
That's why it's called "no loss" and not the "no stop out"
Let's go with the flow
  • #24
  • Sep 16, 2015 2:45am Sep 16, 2015 2:45am
Quoting She1
Expectancy = (0.2 * ((1+5)/2)) * (0.8 * ((1+5)/2) = 1.44 so, do you think it will work if we implement an EA for it, or not ? :/
Sorry She1. I stuffed up with the formula. There should be a minus sign between those brackets. If you apply that to your results you will see it reads negative!.........anyway I am enjoying your thread. :-)
  • #25
  • Sep 16, 2015 2:50am Sep 16, 2015 2:50am
martingale will work when you get a rangy market Markets can range for a long time ... but as soon as it starts trending you keep adding to losersl YOUR BROKE!
Its very simple concept..

Imagine if you were martingailing shorts on u/j as it went from 78.00 to 125.00 ( I know a fool from some chat room who did this)
Same if you were longing Euro from 1.39 to 1.05 Adding to longs as it kept falling.
Makes NO SENSE!!!!!!!!!! ONE MOVE LIKE THAT AND MARGIN CALL your broke!

The math on long term winning without a margincall Does not don't add up.. Its a flawed system.

A lot of people have trouble taking a loss.. So they seek out systems like this....
Small losses are part of the game.
Best to read some trading psych books if you cant take a loss..
I'd recommend Market mind games by Shull. to start with.
but read as many trading psych books as you can!
The only system that will work is one designed by and for yourself.
  • #26
  • Sep 16, 2015 2:58am Sep 16, 2015 2:58am
Quoting bloodpoodle
martingale will work when you get a rangy market Markets can range for a long time ... but as soon as it starts trending you keep adding to losersl YOUR BROKE! Its very simple concept.. Imagine if you were martingailing shorts on u/j as it went from 78.00 to 125.00 ( I know a fool from some chat room who did this) Same if you were longing Euro from 1.39 to 1.05 Adding to longs as it kept falling. Makes NO SENSE!!!!!!!!!! ONE MOVE LIKE THAT AND MARGIN CALL your broke! The math on long term winning without a margincall Does not don't add up.. Its...
You are wrong. There are many ways how martingale can be used.
This is an example I have posted earlier just for illustration.

Attached Image (click to enlarge)
Click to Enlarge Name: Recovery hedging.png Size: 218 KB


Regards,
Artem
Let's go with the flow
  • #27
  • Sep 16, 2015 3:04am Sep 16, 2015 3:04am
thank artem_t and my idea in post #12 has nothing to do with trending or side way market either!
  • #28
  • Sep 16, 2015 3:06am Sep 16, 2015 3:06am
Hi She,

As always when wanting to discuss the martingale thing, you always get the same answers: Don't do that, it has proven wrong so many times, it's impossible, etc., etc., It's inevitable, and those advice are of course benevolent and to prevent you exploding your account.

Guys, so now that we all know that let's go beyond and try to give some answers...

Personally, I'm a fan of the martingale, and I use it already on my live account, you can check my explorer if you want and this thread if you want to follow.

And with the experience I have so far, I can already respond to two of your questions:

1. Do not trade on Fridays, period.
2. Do not trade August and even July. These are holiday months with far less volume and price tend to sometimes act erratically.

And my last piece of advice:

Try to mitigate the multiplier. Don't go 1,2,4,8 etc but instead 1,1.2,1.8, etc... How to do so ? Do your research...

Good luck in your venture.
/BT
Simplicity is the Ultimate Sophistication.
  • #29
  • Sep 16, 2015 3:15am Sep 16, 2015 3:15am
thank you broketrader, you mentioned good notes, do you know the reason why in august 20-25th market in most of pairs had a big movement without a retrace?
and what's your opinion about martingale with a stop loss?
  • #30
  • Sep 16, 2015 3:22am Sep 16, 2015 3:22am
Quoting She1
thank you broketrader, you mentioned good notes, do you know the reason why in august 20-25th market in most of pairs had a big movement without a retrace? and what's your opinion about martingale with a stop loss?
If I remember well, that was just after last Black Monday of august 24 but anyway, my opinion is that you just shouldn't trade August.

As for the stop loss, it's a good idea, think also on a signal that could reverse your position instead of a stop loss, it's worth exploring...
Simplicity is the Ultimate Sophistication.
  • #31
  • Sep 16, 2015 3:36am Sep 16, 2015 3:36am
There is another point I forgot to mention.

If one day you decide to go live, instead of trading with a standard account, try first with a cent account where $100 are shown as $10 000
You know, the deeper the pocket, the larger the chances of success and the less you lose in case of failure.

But be careful and do that only when you are comfortable with your back-tests and need really to go live, not before !
Simplicity is the Ultimate Sophistication.
  • #32
  • Sep 16, 2015 3:45am Sep 16, 2015 3:45am
where can i have a cent account!?
  • #33
  • Sep 16, 2015 3:48am Sep 16, 2015 3:48am
Quoting She1
where can i have a cent account!?
For what I know, Instaforex and Roboforex offer them but there are certainly others.
Simplicity is the Ultimate Sophistication.
  • #34
  • Sep 16, 2015 3:59am Sep 16, 2015 3:59am
Quoting artem_t
{quote} You are wrong. There are many ways how martingale can be used. This is an example I have posted earlier just for illustration. {image} Regards, Artem
I remember trading that "recovery zone" style of Martingale on gold when i started out. And wouldn't you know it just ranged back and forth just outside the recovery zone with out hitting any target. I started at 0.01 lots but after just ranging back and forth several times the lot sizes quickly (exponentially) got out of control.
  • #35
  • Sep 16, 2015 4:09am Sep 16, 2015 4:09am
Quoting BubaYaga
{quote} I remember trading that "recovery zone" style of Martingale on gold when i started out. And wouldn't you know it just ranged back and forth just outside the recovery zone with out hitting any target. I started at 0.01 lots but after just ranging back and forth several times the lot sizes quickly (exponentially) got out of control.
Agree, but it's all about finding the right settings, right time to trade, right pairs to trade and to set maximum amount of attempts - this will lead to drawdowns from time to time, but will help to avoid stop out, which of course will happen sooner or later.
Nobody said it's easy but it's not impossible.

Artem
Let's go with the flow
  • #36
  • Sep 16, 2015 4:18am Sep 16, 2015 4:18am
Quoting AshR
It doesn't go beyond 11 but you can probably dig up a better chart which shows the likelihood of more consecutive losers.
The XLS attached to this post allows you to start the number of consecutive losses from any value you want (just change the numbers in the gray-background cells).
  • #37
  • Sep 16, 2015 4:33am Sep 16, 2015 4:33am
Quoting hanover
{quote} The XLS attached to this post allows you to start the number of consecutive losses from any value you want (just change the numbers in the gray-background cells).
It looks like your table says it all.

I was just wondering, what if in the consecutive losing trade sequence you get partial wins and partial losses ?

How to model that mathematically ? I think it's just impossible like predicting the noise in the markets, almost impossible too.
Simplicity is the Ultimate Sophistication.
  • #38
  • Sep 16, 2015 5:02am Sep 16, 2015 5:02am
Quoting broketrader
{quote} It looks like your table says it all. I was just wondering, what if in the consecutive losing trade sequence you get partial wins and partial losses ? How to model that mathematically ? I think it's just impossible like predicting the noise in the markets, almost impossible too.
Agree, the table has its limitations. Doesn't cover combo sequences of wins and losses, or different size wins and losses, but I assume that if using a standard martingale (1-2-4-8-16-.......) these don't have high relevance, anyway.
  • #39
  • Sep 16, 2015 5:08am Sep 16, 2015 5:08am
Quoting hanover
{quote} Agree, the table has its limitations. Doesn't cover combo sequences of wins and losses, or different size wins and losses, but I assume that if using a standard martingale (1-2-4-8-16-.......) these don't have high relevance, anyway.
Agree too, that's why I said in a previous post that the multiplier (2 in the case of the standard martingale you cited) needs to be mitigated in some way. That's one path that needs to be explored.

Another path is to break the losing sequence with partial losses and if possible partial wins but that's impossible with a grid like all people try to do.
Simplicity is the Ultimate Sophistication.
  • #40
  • Sep 16, 2015 5:19am Sep 16, 2015 5:19am
I'm a programmer and have extensive experience with manual and automated Martingale systems. I would advise against it, it doesn't work long term, unless you have infinite cash which no one has. If we are talking about martingale with stoploss, then it can't be categorized as martingale, it will be called averaging down. Martingale is betting double until you win (or you go bankrupt/blown account), not until a certain condition is false. i.e. Average down to stoploss below major support. Averaging down has huge potential if you know what you're doing.
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