Ninja Strategies to Escape From a Loosing Trade !!. - page 3
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Personally, I do trade something simular to Martingale - as MM only.
However, before we can have the MM, we need some investment (market) strategy.
For this I suggest - take your favorite market indicator(s) to decide which side of the market is most favorable, any reasonable strategy will do as our main objective is a warning about those major trends only.
Then, open your trade in the direction, using your personal block size to determine SL and TP levels.
Then - continue to monitor your indicators and if the market were to change, close your trade and open in the opposite direction.
Keep track of the total pips you have gained/lost until, eventually, the block size is achieved. This would be the same as hitting your SL or TP.
In other words - instead of locking yourself into a single trade (just because of some grid or something) spread that "trade block" over as many trades as needed.
As an example perhaps - yesterday morning my system decided to go into a buy (on the EUR) due to my indicators, the weekend and everything else I look at - this happened at 1.3366 for me.
At the 1.3342 level the system changed back to a sell - a loss of 24 pips.
As I am trading 30 pip blocks, my TP on this sell was then 30+24pips, my SL was 30-24 pips meaning that the block size will be filled at 1.3348 (for the SL side) or 1.3288 (for the TP side)
If the SL side is hit, I will open another trade - this time with twice the number of lots, and try for another 30 pips.
If the TP side is achieved, the current trade string is closed - and I can start again.
Or, my strategy may indicate that a buy may be more favorable anytime before the SL/TP is reached - in that case I will close the sell, open a buy - again using the 30 pip block plus the profits/losses I have made at the moment.
Surely - I do loose the spread everytime I switch direction - it is a small price to pay in order to prevent getting locked into a major counter trend situation.
In conclusion then - I do believe that Martingale MM has validity. However, I find it difficult to believe that it can be implemented successfully without some sound underlying market strategy.jdpnz,
I have to say that I like your 2 posts in this thread because they are wise.
First a strategy is needed and martingale is not a full strategy it can just be a part of it.
I think that it is not enough to start from martingale and then add some indicators to improve it but instead you should do the opposite: try to find a good strategy and see how martingale MM could improve it. But of course it is much more difficult.
I also like when you say that when you get a close or reverse signal you need to close your positions. Here again sometimes martingale will make you feel that you are always right (of course except for the rare huge DD). And that is known to be a major psychological flaw in order to be successful. You need to accept to be wrong.
I wish you great success !
...
First a strategy is needed and martingale is not a full strategy it can just be a part of it.
I think that it is not enough to start from martingale and then add some indicators to improve it but instead you should do the opposite: try to find a good strategy and see how martingale MM could improve it. But of course it is much more difficult.
I also like when you say that when you get a close or reverse signal you need to close your positions. Here again sometimes martingale will make you feel that you are always right (of course except for the rare huge DD). And that is known to be a major psychological flaw in order to be successful. You need to accept to be wrong.
...Well, in the typical martingale strategies we are discussing here, the "signal" and MM are mixed into one. If we try to separate them again, it looks as follows:
- We get a signal (sometimes random) and open an order with a given tp and pipstep (their ratio is very important!)
- If we are unlucky and reach pipstep before tp, we behave as if we had another confirming signal and start another order
- Here comes the martingale progress, we want to cover the losses of the previous orders by choosing a new lot size that allows us to reach profit within the next tp/pipstep settings
The martingale process can of course be applied to any kind of trade/order sequence, it doesn't need this tp/pipstep process. This part is actually the strategy, meaning that we are leveraging the edge/success probability of our signal to reach profit with a higher probability. This works but the price we pay is increased risk in terms of max loss (due to the martingale process).
The extreme version is using random signals and uses settings that allow good results until blowup. The illusion is that we can do without an edge. This would only work if the statistical properties of the pair traded are distorted to our favour. Unfortunately, this may be the case in the short term but not in the longer term.
The conclusion is that we still need an edge, if we don't have it at the entry (quasi random), then we need it at the exit. This means, we most likely need some signals with an edge to get out of our dangling trades without too much damage. On the average, me must get out with a smaller loss than a stop loss would generate. If we don't have an edge, we still have negative expectation for the longer term (due to the spread). It is not just a matter of "how to repair those danglers".
I like what ninja said, but beware of rising spread when NEWS COME CROSS the STREET...
what about this... combine 2 ways trading
we use martingale when price againts us and always increase lot of hedge...
look at the chart
I like what ninja said, but beware of rising spread when NEWS COME CROSS the STREET...
what about this... combine 2 ways trading
we use martingale when price againts us and always increase lot of hedge...
look at the chartI Think it will work
I Think it will work
i 'm not good at programing... anyone?
Well, we never know if we don't try
This is using a pyramide trade as a hedge. In principle a good idea, however, hedging power is too weak. Just count the lots, the losing part grows exponentially, the winner only quadratically ...
You need less aggressive growth of the loser and a better hedge. Current scheme just let's you play a little longer, but doesn't change the outcome ...
I Think it will work
This won't work, it is absolutely the same way to bust, only a little little bit extented. Using this approach you will generate some extra profit when closing at 4th or 5th increment, but this will not stop you from busting on a move like that one last week.
This is using a pyramide trade as a hedge. In principle a good idea, however, hedging power is too weak. Just count the lots, the losing part grows exponentially, the winner only quadratically ... You need less aggressive growth of the loser and a better hedge. Current scheme just let's you play a little longer, but doesn't change the outcome ...
sure.... this is just to make extra pips from trending market.
using 10 pips grid is risky when news come and it makes SPIKE. we need EA with pending order than direct quote at each level.. it will more guarantee us to get the price...
think about this case..
if we use my idea at previous post..
set bleshing EA at maxtrades or max lot...
for example at 7th level...
when price going up to 11 level, the SELL stop at level 7,
but the buy still open untuil 11th level...
it can reduce drawdown too
we still need to watch our EA, although we have the perfect one
Hello
I think that we need additional element of trading, not only sell and buy BUT JUST NO TRADING !!! We dont need constant active market actions.
I think that NO TRADING PERIODS HAS THE SAME MEANING LIKE SELL OR BUY IN THE MARKET.
MARTINGALE is OK ONLY IN TREND, but is THE ACCOUNT KILLER in periods when TREND CHANGES.
No trading is the least risky.
I propose to put in EAs:
1. NO TRADE in very low range market.
2. THE TRANSACTION LIMIT FOR THE DAY - it is not maxtrade.
3. THE TRANSACTION LIMIT FOR EVERY TREND - eg. if we made 10 transaction per trend then wait for new trend, esspecially if we know average lenght of trend for this or other currency pair.
4. OR SEPARATE LIMIT FOR PROFIT TRANSACTION AND FOR LOSING TRANSACTIONS for TREND OR FOR THE DAY.
master001