Does a safe Martingale exist ? - page 13

Pascal
270
Pascal  

No such thing as safe martingale. It is the same as calling the EA a holly grail

krelian99
1202
krelian99  

Wow, this is very fast.

Joshua Graham
243
Joshua Graham  
iGoR:
Whatever martingale that you trade..it will KILL your acount.

Checkt this site Forex Expert Advisors | Expert Advisor for MetaTrader | Forex Robot | Forex EA

They have many EA's that trade with a martingale MM. Severall of those systems made very nice profits for many years. BUT BUT BUT...they all burned their accounts. There is NOT ONE EA over an 8 year period that was succesfull.

FORGET MARTINGALE. DO NOT TRADE IT EVER.
PascalD:
No such thing as safe martingale. It is the same as calling the EA a holly grail
mntiwana:
and if some one want try by his own self to make himself satisfy and believe on his own eye,i can give them one,soon they learnt it,i tried it on demo with 5000 usd balance,it give me 1000 usd in 30 regular hours with .01 lot in start then multiplying.....and then take only one trade in loss and that was the real last trade on that account because in next two hour i was washed out with balance 2 hundred some thing usd.

If you had a car that worked for several years and then suddenly stopped working, would you dismiss the use that you had from the car during the working periods? Wouldn't you zoom in to the failure period to find out what part(s) failed? I don't see the people who dismiss cost averaging (martingale, grid, mean reversion, etc) as part of risk management ever mention any [tick-data backtest-able] alternatives.

Instead I would say that the majority of retail traders should avoid grid/martingale because they will likely not implement it properly (insufficient capital, improper risk controls, improper backtesting, etc.) You have to be able to adjust [quickly] to changing market conditions. It is more for market makers and professional speculators. Markets have to be made, the price discovery process is not random. But the retail trader is on the right track: becoming more objective with their trading decisions, understanding why they trade, etc. is at the heart of grid trading. You can't trade what is essentially an institutional game with a retail mindset.

mntiwana
5221
mntiwana  
4EverMaAT:
If you had a car that worked for several years and then suddenly stopped working, would you dismiss the use that you had from the car during the working periods? Wouldn't you zoom in to the failure period to find out what part(s) failed? I don't see the people who dismiss cost averaging (martingale, grid, mean reversion, etc) as part of risk management ever mention any [tick-data backtest-able] alternatives. Instead I would say that the majority of retail traders should avoid grid/martingale because they will likely not implement it properly (insufficient capital, improper risk controls, improper backtesting, etc.) You have to be able to adjust [quickly] to changing market conditions. It is more for market makers and professional speculators. Markets have to be made, the price discovery process is not random. But the retail trader is on the right track: becoming more objective with their trading decisions, understanding why they trade, etc. is at the heart of grid trading. You can't trade what is essentially an institutional game with a retail mindset.

my dear, in case of car,your asserts are safe with you,in your garage...but in trading..

Joshua Graham
243
Joshua Graham  
mntiwana:
my dear, in case of car,your asserts are safe with you,in your garage...but in trading..

The point of the car example was to demonstrate a mechanical system that was reliable at some point and then failed at another point. Most beginning traders do not understand the game from an institutional level, and usually assume the game is random. Read Trading and Exchanges: Market Microstructure for Practitioners by Larry Harris, Chapter 9: Why people trade to get a better understanding of the different market participants. This way as you improve your strategy, it is likely to reflect the real demands of the other market participants; you know who you are serving (e.g. why you trade).

In regards to feeling safe (e.g. buy and hold, or even worse, trying to pick tops and bottoms), why trade derivatives? Why play a game with such volatility and massive risks? You are better off with a mutual fund, 401k, or CODs at a local bank/credit union.

The most interesting thing about trading is that it wasn't just about technical steps, but the guts to actually pull the trigger over and over.

name
992
name  
4EverMaAT:
The point of the car example was to demonstrate a mechanical system that was reliable at some point and then failed at another point. Most beginning traders do not understand the game from an institutional level, and usually assume the game is random. Read Trading and Exchanges: Market Microstructure for Practitioners by Larry Harris, Chapter 9: Why people trade to get a better understanding of the different market participants. This way as you improve your strategy, it is likely to reflect the real demands of the other market participants; you know who you are serving (e.g. why you trade).

In regards to feeling safe (e.g. buy and hold, or even worse, trying to pick tops and bottoms), why trade derivatives? Why play a game with such volatility and massive risks? You are better off with a mutual fund, 401k, or CODs at a local bank/credit union.

The most interesting thing about trading is that it wasn't just about technical steps, but the guts to actually pull the trigger over and over.

I think that he does not have the choice (due to the country where he trades), but I might be wrong

iGoR
1474
iGoR  
4EverMaAT:
The point of the car example was to demonstrate a mechanical system that was reliable at some point and then failed at another point. Most beginning traders do not understand the game from an institutional level, .............................................. The most interesting thing about trading is that it wasn't just about technical steps, but the guts to actually pull the trigger over and over.

You are not making any sence.

The question I asked when starting this thread was : Does a safe martingale exist ?...

The answer is clearly NO. Not for an institutional not for a retailer not for a market maker. An institutional trader and market maker would never ever try it. And all retailers that tryed it, burned their accounts. If not today then next year.

There is enough proof (that I can and did show) of accounts that went up in smoke. If you would have proof of ONLY ONE account that is profitable over a 3 year period with a martingale MM then I am very interested to look to the results of that account and trader.

Until then I rest my case ;-)

Mladen Rakic
225515
Mladen Rakic  
4EverMaAT:
The point of the car example was to demonstrate a mechanical system that was reliable at some point and then failed at another point. Most beginning traders do not understand the game from an institutional level, and usually assume the game is random. Read Trading and Exchanges: Market Microstructure for Practitioners by Larry Harris, Chapter 9: Why people trade to get a better understanding of the different market participants. This way as you improve your strategy, it is likely to reflect the real demands of the other market participants; you know who you are serving (e.g. why you trade).

In regards to feeling safe (e.g. buy and hold, or even worse, trying to pick tops and bottoms), why trade derivatives? Why play a game with such volatility and massive risks? You are better off with a mutual fund, 401k, or CODs at a local bank/credit union.

The most interesting thing about trading is that it wasn't just about technical steps, but the guts to actually pull the trigger over and over.

Are you talking about Russian rulet?

If you are, then the comparison to martingale may be in place - they end up the same way

Joshua Graham
243
Joshua Graham  
iGoR:
You are not making any sence.

The question I asked when starting this thread was : Does a safe martingale exist ?...

The answer is clearly NO. Not for an institutional not for a retailer not for a market maker. An institutional trader and market maker would never ever try it. And all retailers that tryed it, burned their accounts. If not today then next year.

There is enough proof (that I can and did show) of accounts that went up in smoke. If you would have proof of ONLY ONE account that is profitable over a 3 year period with a martingale MM then I am very interested to look to the results of that account and trader.

Until then I rest my case ;-)

You only proved that some people have failed at implementing cost averaging properly for profit (containing/controlling the risk). You can't invalidate cost averaging any more than I can invalidate the successful implementation of combustion just because of a few examples of engines blowing up or failing. The reason why you rarely see a lot of institutional forward results is because they value their privacy, and they only show it to people who will actually invest the necessary capital. And it probably won't be a smooth equity curve, but rather a series of 'winning' and 'losing' periods. But you can tick backtest and see for yourself. Whenever you hit a stop loss or get to a point where it 'blew up', was it really the market's fault, or your inability to contain the risk? You can pull up a chart and [with enough time] see prices pull back in the opposite direction. 1-min chart is best to zoom in and see it. You'll never see prices go in a single direction indefinitely without some retracement. Even during SNB in January, you'll see pullbacks taking place if you slow down the tick replay enough. You cannot escape mean reversion.

I offer a challenge for you (or anyone on this thread): find one bank, market maker, dealer, broker, etc that does not use mean reversion to track their exposure on their order book. You must have a negative selection portfolio at some point in order to 'make' the market. Cost averaging is a natural part of holding positions and price discovery. The real work is managing the risk, which is where the traders (prop traders, hedge funds, dealers, etc) and fund managers come into play.

If you can show an account that is profitable that did not use some variation of mean reversion, you would likely see that it would not be sustainable because they are not trading lot sizes large enough (or frequently enough) relative to the account balance to make it worthwhile. Or you were lucky enough to find a news trader who is informed and bold enough to act on their research consistently. They would be trading large enough sizes (and/or high enough frequency) to make up for their losses.

Chapter 9 of the book Trading and Exchanges talks more about the different market participants and why they trade. Most people don't understand why they trade, mainly because they don't care (utilitarian traders) or have not traded professionally for a hedge fund, investment bank, broker-dealer, etc. Mean reversion without the proper context is difficult to grasp.

Anyway, back to trading.

Pascal
270
Pascal  

Mean reversion and martingale are supposed to be different things, aren't they?

Trading within expected range and trading regardless of the range could never be the same