Does a safe Martingale exist ?

To add comments, please log in or register
iGoR
1474
iGoR  

Hi,

With this topic I would like to contribute in a very serious way to the world of the martingale "believers".

For those who don't know me or doubt my intentions google on "fxigor".

So I hope with this topic that I can make a new wind blowing in martingaling.

Let me first answer the question to this topic : NO. Pure Martingale in combination with what ever kind of trading system will sooner or later result in blowing up your account.

As A. Elder wrote in his book "trading for a living"...if you would start trading with 1 dollar and you have 37 consecutive losses in a row then on the 38th trade you need to invest the whole WORLD capital....

I know that most of you will say that 37 consecutive losses will never happen and I agree with this. But if you use a pure martingale system and start of with 1 micro lot then after 10 consecutive losses your next contractsize is 10.2 full lots!!

This means that you need to reserve so much of your account balance to make sure that you can take in 10.24 Full lots. But if you do not have any losses that you will hardly make any profit because you trade default only with 1 micro lot. If you have a broker that has a 100:1 leverage you can even forget martingale already. In other words "typical martingale".

The reason for this problem is that martingale looks to a profit that is equal to the loss. Like in a casino and playing black or red then profit and loss are equal.

But if you would now concetrate on a trading system where your avg profit is a bigger then you avg loss or a trading system that has a T/P that is bigger or several times bigger then the S/L then that will give you a total different aproach on martingale.

If you look in the spread sheet that I post then you will very clearly see what the possibilitys are on a T/P or avg win that is bigger then the S/L or the avg. loss.

One extreme:

If one has 12 consecutive losses with a system that has a profit that is equal to the losses it took then on the 13th trade it needs to take in position size that is 4096!! x times bigger then its first trade.

The other extreme:

If one has 12 consecutive losses with a system that has a profitable trade that is 4x times bigger then the loosing trades it took then on the 13th trade it needs to take in position size that is only 15 contracts!! (that contract size is 273 x times smaller with a system that has only 4x times more profit).

Some of you who have experience with trading systems or martingale will now say: It is far more difficult to trigger a T/P that is 4x times bigger then the S/L (ex. 10pips loss and need to hit 40pips T/P is far more difficult then 10pips S/L and making a 10pips T/P) (or that the positive hitrate will drop drasticly).

But if you can also realize that you do not nescessarly need to always recover your total loss and that it does not need to be 4x times as much profit then your loss then you should see that there are quite some possibilitys to find a nice compromize between sometimes "boring" normal trading and extreme martingale trading.

I hope I can bring some of you to new ideas in combination with some trading systems that you had but were not interisting enough to trade or to future systems that you will now try to look at.

For me it most cerntainly did! (do not aks about my results or systems, this topic is to help you in your search)

If you have any questions or need any help then just post....

Friendly regards...iGoR

Files:
BigJoe
1285
BigJoe  

Thanks Igor, Awesome

Great great help !

xx3xxx
1754
xx3xxx  

I never understand Martingale myself -- as it seems to be historical chart explanation to me

but with reference to this week trading

I think I have just figured out what game is what the traders playing in april

will test my new theory next few weeks

---- Martingale: max the TP --- with all respect -- I tried 60pip TP myself >> I simply can't wait to close it when it reach 25 to 40

In the other words, for large TP -- you must be weekly trader with 1 or 2 opened transaction, and large volatility pair to play it -- and I have the doubt that you can set such a large TP --

but very happy that you could show us some screen capture on how to succeed on such big TP with Martingale method

about the TP > SL, you could only hold very few transactions at any 1 time i.e. holding them up to 2 to 3 week

while my understanding of SL is -- you have to allow the volatility to be wtthin your SL region -- so it is quite hard to set TP to be too high (and you have to stop cut it prematurely too -- very diff)

i.e. I have difficult to appreciate that you could really maximise the TP while keeping SL minimal

or it is a good theory ; really tough to do it - in real life live trading (small SL, big TP)

madtrader
3
madtrader  

Funny

Quite funny you should mention soft martingale, I was very interestingly looking at another members approach to soft martingale here who mentioned it first, I speculate that is where you got the idea:

I cannot post any links yet, but you can search Pivot Point Trend Rider by F1Trader and his view on money management. Very articulate.

iGoR
1474
iGoR  
xx3xxx:
I never understand Martingale myself

but with reference to this week trading

I think I have just figured out what game is what the traders playing in april

will test my new theory next few week in the underground secret lab (brand new demo acc)

----

about the TP > SL, you could only hold few transaction up to 2 to 3 week

while my understanding of SL is -- you have to allow the volatility to be wtthin your SL region -- so it is quite hard to set TP to be too high (and you have to stop cut it prematurely too -- very diff)

Hi xx3xxx,

With all due respect but every posting that I read of you on this forum, I never seem to succeed what you write or what you try to explain.

I know that Englsih is also not my native language but I hope that people understand me.

I have the feeling that you write something in your language and that you put that into a language translator.

But that does not work.

Sorry but I red your posting 3 times because I would like to help you but I do not understand you or can not figger out what you mean.....again sorry.

Friendly regards...iGoR

iGoR
1474
iGoR  
Big Joe:
Thanks Igor, Awesome Great great help !

Hi JOE,

Glad you like it...but would be nice to hear more of you. Not nescessarly the system you use but the improvement on your results...by showing some results....even if it is only in a spread sheet.

Friendky regards....iGoR

iGoR
1474
iGoR  
madtrader:
Quite funny you should mention soft martingale, I was very interestingly looking at another members approach to soft martingale here who mentioned it first, I speculate that is where you got the idea: I cannot post any links yet, but you can search Pivot Point Trend Rider by F1Trader and his view on money management. Very articulate.

Hi Madtrader,

I will NEVER steal an idea of somebody else ( I am smart enough to be leading in vision and not lagging in vision). But I am awere that when hundreds of thousands of people are busy with trading that some people can have the very same idea on the exact same moment.

I checked out the topic you refer to and it is a topic where I made also a posting in. I do not see any martingale MM that is in line with what I try to explain here.

If you can give proof of the opposite or show a posting here or any other forum that shows the same as I try to explain, I will ask the administrators to remove my topic immedialty.

Friendly regards...iGoR

BigJoe
1285
BigJoe  
iGoR:
Hi JOE,

Glad you like it...but would be nice to hear more of you. Not nescessarly the system you use but the improvement on your results...by showing some results....even if it is only in a spread sheet.

Friendky regards....iGoR

Yes yes but we need TIME

beckhamis619
54
beckhamis619  

Have you taken a look at Blessing 3?

The martingale approach is similar to your spreadsheet, and fully customizable, by configuring GridSetArray and TP_SetArray. The initial trail of thought can be seen here - https://www.mql5.com/en/forum/general

The multiplier effect, is also customizable based on how much you'd like to increment.

In addition to that, we've a LinearLotIncrement option that instead of multiplying by a factor, we increase it at a constant rate, i.e. an arithmetic progression rather than a geometric progression. The initial trail of thought can be seen here - https://www.mql5.com/en/forum/general

witsnpips
158
witsnpips  

short answer, no.

king midas
12
king midas  

igor, what about no stop loss martingale ea's?

iGoR:
Hi,

With this topic I would like to contribute in a very serious way to the world of the martingale "believers".

For those who don't know me or doubt my intentions google on "fxigor".

So I hope with this topic that I can make a new wind blowing in martingaling.

Let me first answer the question to this topic : NO. Pure Martingale in combination with what ever kind of trading system will sooner or later result in blowing up your account.

As A. Elder wrote in his book "trading for a living"...if you would start trading with 1 dollar and you have 37 consecutive losses in a row then on the 38th trade you need to invest the whole WORLD capital....

I know that most of you will say that 37 consecutive losses will never happen and I agree with this. But if you use a pure martingale system and start of with 1 micro lot then after 10 consecutive losses your next contractsize is 10.2 full lots!!

This means that you need to reserve so much of your account balance to make sure that you can take in 10.24 Full lots. But if you do not have any losses that you will hardly make any profit because you trade default only with 1 micro lot. If you have a broker that has a 100:1 leverage you can even forget martingale already. In other words "typical martingale".

The reason for this problem is that martingale looks to a profit that is equal to the loss. Like in a casino and playing black or red then profit and loss are equal.

But if you would now concetrate on a trading system where your avg profit is a bigger then you avg loss or a trading system that has a T/P that is bigger or several times bigger then the S/L then that will give you a total different aproach on martingale.

If you look in the spread sheet that I post then you will very clearly see what the possibilitys are on a T/P or avg win that is bigger then the S/L or the avg. loss.

One extreme:

If one has 12 consecutive losses with a system that has a profit that is equal to the losses it took then on the 13th trade it needs to take in position size that is 4096!! x times bigger then its first trade.

The other extreme:

If one has 12 consecutive losses with a system that has a profitable trade that is 4x times bigger then the loosing trades it took then on the 13th trade it needs to take in position size that is only 15 contracts!! (that contract size is 273 x times smaller with a system that has only 4x times more profit).

Some of you who have experience with trading systems or martingale will now say: It is far more difficult to trigger a T/P that is 4x times bigger then the S/L (ex. 10pips loss and need to hit 40pips T/P is far more difficult then 10pips S/L and making a 10pips T/P) (or that the positive hitrate will drop drasticly).

But if you can also realize that you do not nescessarly need to always recover your total loss and that it does not need to be 4x times as much profit then your loss then you should see that there are quite some possibilitys to find a nice compromize between sometimes "boring" normal trading and extreme martingale trading.

I hope I can bring some of you to new ideas in combination with some trading systems that you had but were not interisting enough to trade or to future systems that you will now try to look at.

For me it most cerntainly did! (do not aks about my results or systems, this topic is to help you in your search)

If you have any questions or need any help then just post....

Friendly regards...iGoR

hey, what about no stop loss martingale ea's? then what progressions would work with which lot sizes and multiples?

To add comments, please log in or register