Martingale - page 2

[Carmine Pinto]

WilliamBakerFX:

If we can predict the market condition, we will rich without any strategy!

You said a very wise thing. 

You can predict market conditions just at certain degrees but not accurately all the time even if you have a lot of experience..so this is also the reason why martingale is a losing MM approach (especially for modest equity budgets). 

Theoretically, martingale is the holy grail approach with unlimited equity size. BUT, of course no one have unlimited funds if we talk about retail traders; maybe commercials or large speculators have something that is going near this concept. Commercials, in the specific case, can buy more and more as price is going down strongly but they use these positions mostly to cover the risk of price appreciations/depreciations for the primary goods that they need to produce the final product.

Large speculators, on the other hands are capable to hold and keep and manage losing positions for a considerable period of time (that would put down every retail in the world) when price is going down (i.e.) and re-buy back later as price find more and more supports with increased lotsize (this is one of the reasons we can see accumulation phases on the charts)...but their pockets are simply deep and massive; above all they are almost sure to liquidate the positions in profit in the end (sometimes even these large sharks need to close their positions with massive losses, forced by the market brutality against them; in those points we will assist at the creation of important swing points where market turn around because there isn't other fuel to sustain the original direction: substantially "Market doesn't move because it want to move; market move because it have to move").

The better approach I know is, on the others hand, to place high quality trades with an anti-martingale approach and to trade only when you have good chances (no over-trading)

Hope this help.

[[Deleted]]

Carmine Pinto:
You said a very wise thing. 

You can predict market conditions just at certain degrees but not accurately all the time even if you have a lot of experience..so this is also the reason why martingale is a losing MM approach (especially for modest equity budgets). 

Theoretically, martingale is the holy grail approach with unlimited equity size. BUT, of course no one have unlimited funds if we talk about retail traders; maybe commercials or large speculators have something that is going near this concept. Commercials, in the specific case, can buy more and more as price is going down strongly but they use these positions mostly to cover the risk of price appreciations/depreciations for the primary goods that they need to produce the final product.

Large speculators, on the other hands are capable to hold and keep and manage losing positions for a considerable period of time (that would put down every retail in the world) when price is going down (i.e.) and re-buy back later as price find more and more supports with increased lotsize (this is one of the reasons we can see accumulation phases on the charts)...but their pockets are simply deep and massive; above all they are almost sure to liquidate the positions in profit in the end (sometimes even these large sharks need to close their positions with massive losses, forced by the market brutality against them; in those points we will assist at the creation of important swing points where market turn around because there isn't other fuel to sustain the original direction: substantially "Market doesn't move because it want to move; market move because it have to move").

The better approach I know is, on the others hand, to place high quality trades with an anti-martingale approach and to trade only when you have good chances (no over-trading)

Hope this help.

Thank you very much @Carmine Pinto

[Carmine Pinto]

WilliamBakerFX:

Thank you very much @Carmine Pinto

You are welcome.

Escape from illusions, your asset will be grateful with you ;-)