Everyone says Martingale will blow your account, and I agree under most circumstances it will but, what if the system over a whole year backtest has a maximium 6 consecutive losses and an average of 2, would this not seem to be a good system to apply martingale to ?
Just because a backtest had a maximum of 6 doesn't mean a forward test couldn't have 10 in a row. The last trade would have to have 1024 times initial lot size. Do you have a $million account for that margin? If no, then you have blown your account.
Well, even if you do not blow your account, your pos size in the major part your winning trades has to be ...how much? 1 microlot?
In my opinión, is better to asume some losses and built a different strategy.
Also with a million account you can get losses, Every broker allows a maximum lotsize we can't trade more then that
Ofcours you can maybe split the trades in allowed lotsize but what will happen if we all use martingale maximum lotsize
with prices of currencies ? ....... A lot of spike prices ?
Although sensible use of martingale can be very profitable,
I think if you wanna use it then use it for strategies with a higher profitchance atleast more then 50%
and don't start it with a small account risking a margincall.
The system SDC you talk about looks to me a good system to use with martingale if it is not risking too much the trade
But keep then following that system with martingale. if there are enough trades and you will see 6 losses in a row.... or more... it is risky
So what system do you talk about... One that can have 6 losses in a row ?
I think some who replied might be assuming to start with 1 lot.
I used 0.01 initial lot size, so the sequence is 0.01, 0.02, 0.04, 0.08, 0.16, 0.32, 0.64, 1.28 only now after 8 losses, do we start to enter the domain of larger lot sizes 2.56, 5.12, 10.24 so after ten consecutive losses its time to start sweating on a 10 lots trade ....
This is exactly what I do also. I usually have a Variable called Size%=1 and Reward%=1; This usually translate into Size(Take-Up)1% of my Margin-Per-Trade and Return(Profit>=)1% of my Margin Close_All. The truth is this really doesn't have Nothing to do with Money Management its More Lot-Sizing. True MM would say something like Whats 1% of my Equity? Ok, Trade, don't lose more than that. IMO, someone cannot practice True Money-Management unless they know the True-Edge of their System (Kelly-Criterion).
With the Size approach, my systems takes bigger sizes as the Money grows. Therefore the Risk is always the same as it was on day-1.
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