Discussion of article "Martingale as the basis for a long-term trading strategy" - page 3

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Martin may end up with a busted position, but as long as he can double his profits in the time it takes to bust, then what's the harm in busting? It's all about striking a balance between busting and doubling. And besides, do you guys run an EA and just do nothing about it?
 
This kind of EA is a big hit, you're welcome to PASS, go to hell, don't promote it here.
 
nevirik:

But if we slightly change the condition of the game and stop at the 1000th time getting a profit of $ 1000. And then, for example, the next day start the game again, then it turns out that the plum 1024 times does not come and we do not lose.

It turns out that this article does not prove anything and the result is not even zero.

How are you going to determine that you are on step 1 and not on 1023?

Why can't the next day, your optimistic 999, turn out to be 1024 in reality?

"Draining 1024" is not evenly distributed and it is quite realistic that quite a long stretch can consist of only draining periods.

The use of martingale is an expensive folly

 
Hongbo Li:
Martingale ultimate destination: burst positions burst positions burst positions!
Just in time to use the burst position as the ultimate stop loss.
 

How many times must Martingale be completely discredited before people stop writing about using it?

It's an absurd failed betting strategy from the 1800's that is provably idiotic.

 
richard96816:

How many times must Martingale be completely discredited before people stop writing about using it?

It's an absurd failed betting strategy from the 1800's that is provably idiotic.

What is wrong about discussing Martingale and which strategy is less absurd than Martingale given that more than 90% of traders loose money trading with indicators supplied with MT4/MT5 and other platforms? 😥

BTW, what appears discredited by the masses many times is simply not correctly used by the masses.

Or do you have the secret formula?

 
 Great article. I've been a martingale geek for 10 years.
 

I think generally martingales can work long term, but a number of factors need to be considered and optimization of the system needs to be implemented. 

Using a martingale strategy myself I've learnt that a large deposit is needed, even for 0.01 lots. It'll give the system room to breath when markets suddenly trend for days without the needed pullback. I personally have a rule of no less than $3000/0.01 lot - this is conservative but gives me fewer headaches. 

Moreover the opening of a new trade/batch should be improved upon. This is where indicators come in (or smart price action) - personally I think the H1 og H4 RSI could work to help with the direction of the next batch of trades. I don't want the system to open a new buy order when RSI is fx. > 60 or a new sell order when RSI is < 40. RSI levels are generally respected on H1 and H4 and the system should have room to breath from RSI 40 down to 20 or RSI 60 up to 80 (as an example) which should help keep the DD to a minimum. 


Other ways of reducing risk would be to implement a loss minimization rule - when max no. of orders is reached the system should go into loss prevention/minimization mode. That my be implementing a tight trailing stop if/when it goes into profit but still has a way to go before hitting TP. One could also implement a rule based on supply/demand zones where the system closes in loss when/if the current open trades reaches these levels if the TP level is on the wrong side of the supply/demand zones. The batch will close in loss, but account is saved. 


I hope this discussion is still open and if there are any MQL developers out there I'd be happy to discuss implementing these and testing. 


/Christopher 

 
Martin is just a strategy, it's mostly about how it's used.
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