I have been reading a lot of threads and am amazed at all the great ideas and different trading systems. I have a possible EA that I would like your feedback on... positive and negative.
I am sure we all know Martindale... place a bet, if it is a loser, double up the next time and keep repeating until you get it right. The two major cons are one, you keep doubling up until your run out of money and two, when you get it right, you gain a small % as to what you wagered/traded that your risk/reward is very small.
Here is my idea for a modified Martindale. Take the GBP/USD for example. It moves a lot of pips every day. What if you took a position, long for example, and if it hit 50 pips, you profited out. But if you went long and it went South, then at the 50 pip negative mark, you doubled up for a short (maybe it's on a big move South?). If it went another 50 pips South, your out 50 pips in the black. If it reversed and went 50 pips North (to your original entry), you doubled up again for a long entry and exited out if it went 50 pips longer.
I think this MAY have some merit because you would only be "doubling up" if the pair traded in a 50 pip range. Since the cable moves more than 50 pips a day, you doubling up would be limited. Second, you would take advantage of big moves in one direction, especially if trailing stops were added.
What is the community's thoughts????
I have experimented with this doubling after losing trades. There is no question that it can make for some exciting and profitable trading However, there is one key factor required for a reliiable result. And that is that the reason for entering the position must have a positive expectation of a gain. In other words, this method can make profitable systems better, but the reverse is true, that losing systems can lose much faster. I see no reason for an expectation of gain in your cable reverse proposal.
btw, this kind of system will help you find your risk tolerance limit after it doubles a few times.
Isnt it called Martingale?
Martingale (betting system - Wikipedia, the free encyclopedia)
From 18th century france?
Using Martingale is like you want to recover your loss. You're paying attention on recovering loss instead of aiming for your profits. I've tested several of these Martingdale money management systems, and none of them worked. I guess this thing is for betting games like blackjack, roulette or spead betting.
I'd would go with conventional money management for trading based on market cycle.
aha, someone was thinking idea that similiar with me.
i agree with you.
except for martiangle, i totally disagree with it, right now.
the lack for this system is when swing/whipsaw happen.
i wanna hear negative side of this system from someone who is more critical than me.
here you will find the similiar system
Theres one on fx tsd that uses this martingale with a hedging strategy and live statements seem to look ok.I wouldnt use it of course, but the one they are optimizing looks like it could make profits.