Martingale - page 3

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Sergey Golubev
Moderator
110456
Sergey Golubev  
Cassiano Jardim:

I did such. Automated off course. I started with 3 pairs "triangle" correlation, thought it was so flat then incorporated + 3 pairs to the same strategy. However, i was uncomfortable worried that someday I could be in a trouble! But i made it work! and I had profits over 5 months. Without VPS, Crazy! Then stopped because i like Manual trading as i have the tendency to disagree with the areas where the EAs place the orders. My issues off course! 

The biggest risk of doing it, on my opinion, was being on the trade when the chart was close to a huge release. Like for example BREXIT. Or China vs US economy war etc... 

In the other hand, for those who doesn't know, the same strategy could work even better if made with a lot of money, but actually only trading the news, and huge volatiltiy. Of course, "Martigale". I don't like it! but its true that it works! 

This is free forum, and the members of this forum should get everything for free.
Can you upload something yours in the source code?
Why not?

Cassiano Jardim
523
Cassiano Jardim  
Sergey Golubev:

This is free forum, and the members of this forum should get everything for free.
Can you upload something yours in the source code?
Why not?

Suppose if I give you a car for free. However, afterwards you realize that the engine have serious issues, the breaks were not working, and the actual documents + license + insurance has to be paid with penalties, and tax. Big time! My friend. No offense, but this is not my major, and on my opinion, everything given for free I would be questioning my self why would somebody give up of making money and make a powerful tool become available for all. 

Hope to keep the debate on the subject. Hoping that someone here that have a really profitable martigale if could explain us the mathematics involved on their side. 
Sergey Golubev
Moderator
110456
Sergey Golubev  
Cassiano Jardim:
...

Hope to keep the debate on the subject. Hoping that someone here that have a really profitable martigale if could explain us the mathematics involved on their side

I am not against any discussion here.
I am just providing the information about the following:

  • If this profitable EA is commercial EA from the Market, or free EA from the Market, or commercial EA from external websites, or it is the signal promoting by the signal provider on the forum (direct promotion or hidden promotion), and so on - it will be considered as illegal commercial promotion on this forum, and the members will be banned.
  • If course, if this profitable EA is from CodeBase (free to download from CodeBase) or someone uploads EA to this thread by source code so it is not a problem at all.

For information.

ffoorr
1330
ffoorr  

Here is an MQL5 article about martingale

https://www.mql5.com/en/articles/1481

And another one here :

https://www.mql5.com/en/articles/5269

What is Martingale and Is It Reasonable to Use It?
What is Martingale and Is It Reasonable to Use It?
  • www.mql5.com
If you write "martingale" in a search engine box, it will return a large number of pages with the description of this system. It is interesting that among others you will meet web-sites of online casinos, which assure that this system works, all you need is entering your credit card number to start scooping up money. What is strange - are the...
Petr Baskakov
1016
Petr Baskakov  
What works - is not on sale. What - usually does not work for free
Cassiano Jardim
523
Cassiano Jardim  

Soft/Hard Stop

If you trade using "Martigale", note that have several mathematical back-testings that you could be exploring in order to resist longer losses. However, I would recommend the method only for those that do not look at this market as a 50% x 50% roulette. This technic could be used when things are getting out of your study, but not out of your control. In the other hand, if you don't want to waste your time looking for the "Price Action", then i believe you can disregard it. I'm not Fan of EAs, and do not like "Martigale", but this technique is far used no matter the system you have. Hope that helps. 

ffoorr
1330
ffoorr  

If someone talk about martingale, as beeing the system which consist in doubling lot each time the trade lose;

Then it do not worth it, the backtest is always the same, small profit and big drawdown

https://forexrobotnation.com/wp-content/uploads/2017/05/backtest-chart.jpg

https://www.profitf.com/wp-content/uploads/2016/03/safe-martingale-part1.png
ffoorr
1330
ffoorr  
ffoorr:

If someone talk about martingale, as beeing the system which consist in doubling lot each time the trade lose;

Then it do not worth it, the backtest is always the same, small profit and big drawdown

https://forexrobotnation.com/wp-content/uploads/2017/05/backtest-chart.jpg

https://www.profitf.com/wp-content/uploads/2016/03/safe-martingale-part1.png

Here is a martingale I created within one hour :

extern double Distance = 300;
double lot = 0.01;

int MagicNumber = 4512;
double last_history_profit, last_lot;
int last_tip ; 
//+------------------------------------------------------------------+
//| Expert tick function                                             |
//+------------------------------------------------------------------+
void OnTick()
  {
//---
   int ticket = -1;double lots = 0.0;
  
  if( OrdersTotal() == 0 && OrdersHistoryTotal() == 0)
    {
    ticket=OrderSend(Symbol(),OP_BUY,lot,Ask,3, Ask-Distance*Point,
                      Ask+Distance*Point,"first_buy",MagicNumber,0, clrPaleGreen);
    }

  if( OrdersTotal() == 0 && OrdersHistoryTotal() > 0)
    {
      last_history_profit(); 
     
     Print( " last_history_profit       ", (string) last_history_profit  );
     Print( " last_lot       ", (string) last_lot  );
     Print( " last_tip       ", (string) last_tip  );
     
      if( last_history_profit < 0 )
         {
         lots = 2*last_lot; 
         if( last_tip == 0 ) 
           {
           ticket=OrderSend(Symbol(),OP_SELL,lots,Bid,3, Bid+Distance*Point,
                      Bid-Distance*Point,"sell ",MagicNumber,0, clrPaleGreen);
           }
         if( last_tip == 1 ) 
           {
           ticket=OrderSend(Symbol(),OP_BUY,lots,Ask,3, Ask-Distance*Point,
                      Ask+Distance*Point,"buy",MagicNumber,0, clrPaleGreen);
           }  
        }
      else
       {
         if( last_tip == 0 ) 
           {
           ticket=OrderSend(Symbol(),OP_BUY,lot,Ask,3, Ask-Distance*Point,
                      Ask+Distance*Point,"buy",MagicNumber,0, clrPaleGreen);
           }
         if( last_tip == 1 ) 
           {
           ticket=OrderSend(Symbol(),OP_SELL,lot,Bid,3, Bid+Distance*Point,
                      Bid-Distance*Point,"sell ",MagicNumber,0, clrPaleGreen);
       } }  }
  }
//=======================================================================
//============================================================================
 double last_history_profit()
   {
   double cpte_profit = 0; //int Magik_No = -1;
        if( OrderSelect(OrdersHistoryTotal()-1,SELECT_BY_POS,MODE_HISTORY) )    
          {
           if( OrderMagicNumber() == MagicNumber ) {
           last_history_profit  = OrderProfit();
           last_lot = OrderLots();
           last_tip = OrderType();
          } 
       }
  return(0);
 }
//============================================================================
Pui Yan Lam
530
Pui Yan Lam  
Roger Pinheiro:
No betting system, including Martingale, offers any advantage in expectancy over flat betting, over any number of trials (trades). Prove the laws of math wrong, by using the attached XLS. Go on, you know you want to! Type any combo of values into the yellow cells that result in the gray cell (AK8) having a non-zero value, and re-post the XLS here. Then ready yourself to accept the relevant Nobel prize. (all assuming there are no bugs in the XLS formulae )

Let's apply some common sense. If it were possible to gain any kind of edge at roulette by varying bet size, everybody would go down that path, and casinos would be forced to change the game mechanics. It's not just the table limits that restrain you. Sure, they're there to protect the casino against a freakishly lucky punter, but even without those limits Gambler's ruin (en.wikipedia.org/wiki/Gambler's_ruin) would ensure that virtually every punter who doubles up repeatedly will end up bankrupt long before the casino does.

Similarly, if it were possible to win at forex by using MM (i.e. varying position size or method) alone, then surely every trader would go down that path, and become a millionaire. The 'willing-buyer, willing-seller' and zero sum game constraints provide proof that this is an impossibility.

Averaging down will give you +EV to whatever extent the probability of price reverting to a mean improves, the further it trends away. Increasing one's bet size as probabilities improve is smart (ask any Blackjack pro). But increasing one's exposure without limit is guaranteed to eventually result in irretrievable drawdown.

Here's the rub. Let's say we average down, doubling our pos size every 10 pips. If price moves 80 pips against us, that's 1+2+4+8+16+32+64+128 = 255 units at risk. So we need odds of 255 to 1 in our favor that price will reverse 10 pips, before it falls another 10, to justify that bet size. The problem is that our bet size is based on our desired account balance, and is no longer commensurate with the probability that's being offered by the market.

And let's not forget that costs must be overcome. With a 2 pip spread, you'd need price to move 12 pips in your favor (TP) before it moves 8 pips against you (SL).

Ironically, Martingale guarantees a 100% win rate, until you lose everything. The only consolation is that the losing sequence that causes the 'death trade' might not happen during your lifetime. Irony #2 is that the longer you live, and the more often you trade, the greater the probability that you'll encounter it. There might be several hundred chambers in the gun, but you never know which one holds the bullet. Maybe it won't happen until the year 2030. Or maybe it will happen next week.

There are lots of ways to mitigate the effect of the Martingale:

1. You can use a less severe betting progression (e.g. Fibonacci steps, d'Alembert, etc), but then it takes more than 1 win to return to breakeven, i.e. you cripple your recovery rate. You need multiple wins without intervening losses, making recovery more difficult. So you're effectively offsetting one type of risk with another.

2. You can start with a nanolot pos size, but then your return is reduced in proportion with the risk. Not much point in having a $10k account and winning only 10 cents per trade. (Then, after (say) 10 losses, having to risk $204.80 just to make 10c!)

3. You can cut your losses and start over, e.g. after 5 losses, but then you're back to sizing at 1 unit, so you'll need 1+2+4+8+16 = 31 consecutive wins just to recover to breakeven. Or after 6 losses, you'll need 63 consecutive wins. And so on. Just another way of crippling the recovery rate.

4. You can withdraw winnings from the account periodically, but in doing so, there's less funds there to provide a buffer against a prolonged losing streak, thereby increasing the probability of a margin call. And there's no guarantee that you'll make the withdrawal before the death trade occurs.

The conclusion is: In any activity that involves uncertainty, return is always somehow commensurate with risk. To assure a 99.99999% win rate, you have to take an 0.00001% risk of losing everything. The innate, perfectly balanced equilibrium ensures that there's no exploitable loophole, no free lunch.

Anybody can get lucky in the short term. And maybe more than once. But I assume that most folk here aspire to be traders rather than gamblers. Having said that, there's no law against using forex as a vehicle to gamble, and with more leverage than any casino will ever offer you, should you choose to. Good luck!

thats why casino set max bet / min bet for each table to avoid martingale betting

Cassiano Jardim
523
Cassiano Jardim  
Well. When talking about probabilities and mathematics, I think Martigale is very bad! Because if you start loosing, and supposed that you accepted going forward even knowing that you are going to increase the risk drastically, but just because you have a back-test which shows you that the market did not won you before. This is basically like playing Poker when you have odds, but you don’t have the best hand! Until you realize it, you could be very much committed, and easy manipulated! Still think that Martigale could be a good system for those who have a lot of money! Not me. 
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