Does a safe Martingale exist ? - page 10
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there is no such thing as completely safe martingale, but there is no such thing as a completely safe trading strategy also. There are a few methods to make the strategy as safe as possible, mainly:
- use lot sizes that your trading account can handle. So many people want to overtrade in a small range. it is tempting, but understand the average range that the market will travel for your strategy and then adjusting lot size accordingly to avoid overtrading. Use a spreadsheet to help you determine the correct lot sizes to use.
- One advantage of forex is the ability to position size with small units. Use it.
- You do not have to use all of the levels of martingale. You can restrict it to 2-6 levels deep. That should be more than enough to trade a 50-600 pip range or more profitably.
- Aggression should not be confused with recklessness. Aggression is actually desirable in many instances to maximize profitability. You can always test different strategies out and see how they would play out in a simulated environment. With a decent simulation, a live environment should not perform much better or worst.
Recklessness is about intentionally abusing the tools you are given beyond its mechanical limits.
there is no such thing as completely safe martingale, but there is no such thing as a completely safe trading strategy also. There are a few methods to make the strategy as safe as possible, mainly:
- use lot sizes that your trading account can handle. So many people want to overtrade in a small range. it is tempting, but understand the average range that the market will travel for your strategy and then adjusting lot size accordingly to avoid overtrading. Use a spreadsheet to help you determine the correct lot sizes to use.
- One advantage of forex is the ability to position size with small units. Use it.
- You do not have to use all of the levels of martingale. You can restrict it to 2-6 levels deep. That should be more than enough to trade a 50-600 pip range or more profitably.
- Aggression should not be confused with recklessness. Aggression is actually desirable in many instances to maximize profitability. You can always test different strategies out and see how they would play out in a simulated environment. With a decent simulation, a live environment should not perform much better or worst.
Recklessness is about intentionally abusing the tools you are given beyond its mechanical limits.so 4EVERmaAT,what happens if with the 2-6 levels deep you mention you are hit with consecutive losses,what do you do? and what also happens when the 50-600 pips is depleted and within the said period of trading you had 85% loss 10% win and 5% BE would you still call that trading at all?
below is an example of an EA that has martingale settings in it,though the account didn't blow up i believe that martingale look alike could be developed and with reasonable trading strategy it could come out much better the this
so 4EVERmaAT,what happens if with the 2-6 levels deep you mention you are hit with consecutive losses,what do you do? and what also happens when the 50-600 pips is depleted and within the said period of trading you had 85% loss 10% win and 5% BE would you still call that trading at all?
I do not trade with stops, and recommend people do not trade with individual stops. You have an equity stop loss that takes care of the minute possibility of a meltdown. You instead use the cost averaging to either: a) profit, b) break even, or c) smaller loss. This gives you more flexibility and staying power to ride out multiple market scenarios vs trying to pick tops and bottoms and loading all of your position(s) in one place.
I don't promote recklessness, which is a direct result of trading lot sizes too large for the margin/equity available. There is aggression, and a time and place for it. Trading lot sizes too large for the equity available is how an implementation of martingale into position sizing can fail. You 'bet it all in' hoping to get lucky in doubling account quickly, or something similar.
% winners is not important. You can actually have smaller amount of winning trades than losing trades. What is more important is, over many repetitions, will the winners outlast the losers? Since price action is linear (either the price increases or decreases from previous price), you can determine the outcome of your net positions directly by how you structure your trades, as I proposed in the previous post.
Ahhhh...the "what if" scenarios; fear at its best. Holds your mind hostage with indecision, and you can never make a proper choice. It's funny, but we never think in these terms when we board an airplane, or step on a boat, or get into our car. You never think about how many feet in the air you are or how deep the ocean is (drawdown). You know as long as the fundamental mechanics of lift (or floatation) are respected, you will always get from point a to point b with little problems. Is there a always risk of crashing or sinking? But you either go after your goal 100%, or stay home. The irony of this whole fear thing is that trading has much less variables outside of our control.
I had a similar trading systems in principle with IGOR.
It Stop and Reverse by a Stop Loss, an increment in Lot sizing. And I'm looking to code into EA if anyone here is willing.
It should be traded in Trending pairs, like the Yen Pairs, --> GBPJPY.
An adjustable Lot increment, recommended is x1.1, a 10% increase.
so the lot progression will be something like: 1, 1.1, 1.2, 1.3, 1.5, 1.6, 1.8, 1.9, 2.1, 2.4, 2.6, 2.9, 3.1, 3.5, 3.8, 4.2,4.6, ....
this is not a strategy that will bring profit in over night but rather long term, it require big pips movement to gain profits.
Trade is trigger by closing candle, if close higher than open Sell, v.v. (which does not really matter...)
Let say we enter Buy 1 @ 120.25 - range 25, next trade would be Sell 1.1 @120.00 and SL -25, the rest should be on the excel chart. a 12 Level would required about 175 pips to break even with d/d 534.60 (lets assume $1/pip)
IMO this is achievable in the Yen pairs. Any opinion/suggestion?
is this martingale possible?
Trending maybe. Couter-trend all failed including Envy. Send in the scouts and add bigger lot size alonfg the way.
I prefer a martingale that reverses positions. Buy 0.1 lots and if the market goes down by 20 pips, close the position and Sell 0.2 lots. This leaves you with almost double the margin free, and it closes positions that are in a loss instead of holding on to them while they continue to lose more. I am working on an EA that does this, and then when it catches a trend, it continues to build positions. So, lets say at 1.6 lots it moves up 100 pips. Then, it buys another 1.6 lots with a tight SL. At another 100 pips, it buys 3.2 lots with a tight. A great way to build very large positions.
Hi,
I am using a similar system as yours. I increase the lot size at 61.8% to the previous lot. For example if I start with 0.1 lot buy and it hits stop of 7 pips I sell at 0.16 lot. I set my take profit level at 61.8% more than the total loss accrued. Its almost 18 pips on average. What do you say?
actually, there is no safe martingale. because of potential blow out. 1 massive news can wipe out you account even if you have 20,000 and starting with .01 lots...
for me. its not worth investing large on martingale,.. it would only use it in small account as (play / gambling mode).
i think, there is a better approach on this & i have tried but it requires serious skills, not just following your regular grid....
your TP should be greater than your SL/Grid distance... this will make Dradown less and lot increments to be smaller..
to have a good idea to what im pointing at,, you should know the market language.. if you know elliott wave.. you know what are "C" waves... if you base your grid distance using C wave signals. you will have good entry in the next position.. not just by constant pips..
for me, it is dumb to enter on a position that you havnt analyzed.. every trade counts, that what makes your equity progress.
honestly, i know hedgefunders,, and this is what they do
hahaha.
btw, i have a tread regadring good entry signals.. you can use martingale on this, and you wont have high DD. but if your serios in making money in forex... stop martingale.. its only for those who have SUPER HIGH BALANCE and a small risk would make them 5 digits
https://www.mql5.com/en/forum/182653
The majority of the comments that I see against martingale have not actually used it strategically. For a long time I used only single lot sizes with small increases in lot size or decreasing the grid spacing which has a similar effect to increasing position size as the trend deepens. But I tested and found that martingale with 2x multiplier outperforms single lot sizes every time. The drawdowns are the same or less in all of the cases, and with proper money management you do not hit your stop loss except for a tsunami event. Regular news announcements and volatility (including NFP) should be fine.
One of the major keys is to plan out how much of a range you are prepared to deal with, use proper spacing, and then work out net profits in between the ranges. Martingale is just part of the overall risk management strategy. If you do not have the other components of a complete trading system (like exits, entry detection, exact/scalable entry systems), then you will fail.