What will be risky if we combine martingale and hedging? - page 3
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Dear experienced traders,
I think if we can combine some strategies combine with both martingale and hedging, it will be a very strong strategy.
How do you think combine martingale and hedging? Will it be risky mathematically?
* Known demerit for combine martingale and hedging is below:
1. We have to pay double spread and commotion.
2. We have to take care double drow down.
3. More opportunity/risk to enter.
Thank you in advance and best wishes,
Sky
Hi there,
I have worked for three different institutions during my career.
And here is my humble (and 100% sincere) opinion on this subject.
==================================================================
EVEN THOUGH A MARTINGALE STRATEGY MIGHT SEEM HIGHLY TEMPTING,
IT IS 100% GUARANTEED TO BLOW YOUR ACCOUNT LONG TERM.
THEREFORE, IT IS BETTER FOR YOU (PERSONALLY) IF YOU FOCUS YOUR
EFFORTS ELSEWHERE. AND IF YOU STILL WANT TO PURSUE SOME TYPE
OF MARTINGALE STRATEGY, PLEASE THINK ABOUT THE FOLLOWING:
The biggest hedge funds in the world, who manage billions (sometimes trillions)
of dollars of investor capital, have all (at one point or another) tried to figure this out.
And these institutions have been working on this for many decades. Ever since the late 1940's,
beginning with the first hedge fund in the industry (Jones and Co).
Over the years, these hedge funds have had access to the smartest people on the planet,
with the ability to hire an army of PhD math quants. As well as an unlimited number of
highly talented analysts and traders.
And they also have access to multi-million dollar budgets. With all of the best data and all
of the best software. Yet even with all of this, they STILL have not figured out a way to create
a martingale strategy that can work long term.
So what does this tell you???
BOTTOM LINE:
A martingale strategy will ALWAYS blow your account long term.
Therefore, please do not listen to anyone trying to sell you a 'secret martingale EA'
or a 'secret martingale strategy'. And anyone who makes these types of claims is simply
lying to you and trying to take your money.
IN REGARDS TO HEDGING:
If used properly, hedging can protect a statistical edge by dampening the magnitude
of your overall drawdowns. Creating a smoother equity curve.
But proper hedging is a very, very complex process. And even perfect hedging can not
negate the underlying laws of mathematics. Therefore, when it comes to a martingale
strategy, the only thing hedging can do is delay the eventual collapse of your account.
But in the end, you will blow your account either way.
========================================================================
This is my humble opinion on this subject and I wish you the best
of luck with all of your trading going forward. =)
Thank you, Marco.
I got it.
And for me, Anti-martingale looks very good.
Why the font is different, does it have any meaning for that?
you need trends with anti martingales. and trends are rare. so you will have many small losses and one big win
good luck with that
Hi there,
I have worked for three different institutions during my career.
And here is my humble (and 100% sincere) opinion on this subject.
==================================================================
EVEN THOUGH A MARTINGALE STRATEGY MIGHT SEEM HIGHLY TEMPTING,
IT IS 100% GUARANTEED TO BLOW YOUR ACCOUNT LONG TERM.
THEREFORE, IT IS BETTER FOR YOU (PERSONALLY) IF YOU FOCUS YOUR
EFFORTS ELSEWHERE. AND IF YOU STILL WANT TO PURSUE SOME TYPE
OF MARTINGALE STRATEGY, PLEASE THINK ABOUT THE FOLLOWING:
The biggest hedge funds in the world, who manage billions (sometimes trillions)
of dollars of investor capital, have all (at one point or another) tried to figure this out.
And these institutions have been working on this for many decades. Ever since the late 1940's,
beginning with the first hedge fund in the industry (Jones and Co).
Over the years, these hedge funds have had access to the smartest people on the planet,
with the ability to hire an army of PhD math quants. As well as an unlimited number of
highly talented analysts and traders.
And they also have access to multi-million dollar budgets. With all of the best data and all
of the best software. Yet even with all of this, they STILL have not figured out a way to create
a martingale strategy that can work long term.
So what does this tell you???
BOTTOM LINE:
A martingale strategy will ALWAYS blow your account long term.
Therefore, please do not listen to anyone trying to sell you a 'secret martingale EA'
or a 'secret martingale strategy'. And anyone who makes these types of claims is simply
lying to you and trying to take your money.
IN REGARDS TO HEDGING:
If used properly, hedging can protect a statistical edge by dampening the magnitude
of your overall drawdowns. Creating a smoother equity curve.
But proper hedging is a very, very complex process. And even perfect hedging can not
negate the underlying laws of mathematics. Therefore, when it comes to a martingale
strategy, the only thing hedging can do is delay the eventual collapse of your account.
But in the end, you will blow your account either way.
========================================================================
This is my humble opinion on this subject and I wish you the best
of luck with all of your trading going forward. =)
I'm totally agree with that point of view. I would like to add that :
- beyond "martingale", there's the need to add lots to a position
- beyond "hedging", there's the need to lock/reverse to your advantage a position
I think they shouldn't be considered as standalone strategies, they are not, they are technics and they have to be part of a higher context to be used
Hi there,
I have worked for three different institutions during my career.
And here is my humble (and 100% sincere) opinion on this subject.
==================================================================
EVEN THOUGH A MARTINGALE STRATEGY MIGHT SEEM HIGHLY TEMPTING,
IT IS 100% GUARANTEED TO BLOW YOUR ACCOUNT LONG TERM.
THEREFORE, IT IS BETTER FOR YOU (PERSONALLY) IF YOU FOCUS YOUR
EFFORTS ELSEWHERE. AND IF YOU STILL WANT TO PURSUE SOME TYPE
OF MARTINGALE STRATEGY, PLEASE THINK ABOUT THE FOLLOWING:
The biggest hedge funds in the world, who manage billions (sometimes trillions)
of dollars of investor capital, have all (at one point or another) tried to figure this out.
And these institutions have been working on this for many decades. Ever since the late 1940's,
beginning with the first hedge fund in the industry (Jones and Co).
Over the years, these hedge funds have had access to the smartest people on the planet,
with the ability to hire an army of PhD math quants. As well as an unlimited number of
highly talented analysts and traders.
And they also have access to multi-million dollar budgets. With all of the best data and all
of the best software. Yet even with all of this, they STILL have not figured out a way to create
a martingale strategy that can work long term.
So what does this tell you???
BOTTOM LINE:
A martingale strategy will ALWAYS blow your account long term.
Therefore, please do not listen to anyone trying to sell you a 'secret martingale EA'
or a 'secret martingale strategy'. And anyone who makes these types of claims is simply
lying to you and trying to take your money.
IN REGARDS TO HEDGING:
If used properly, hedging can protect a statistical edge by dampening the magnitude
of your overall drawdowns. Creating a smoother equity curve.
But proper hedging is a very, very complex process. And even perfect hedging can not
negate the underlying laws of mathematics. Therefore, when it comes to a martingale
strategy, the only thing hedging can do is delay the eventual collapse of your account.
But in the end, you will blow your account either way.
========================================================================
This is my humble opinion on this subject and I wish you the best
of luck with all of your trading going forward. =)
Thank you so much for your advice, Yossarian.
>>hedging can do is delay the eventual collapse of your account.
By my analysis these days, hedging could work with martingale like below:
Take profit increase 20%~40%, drow down increase 100%~170%, change to blow up(open big lots) increase 100%~200%.
Because of more open positions, both profit and risk increase.
But it still attract me.
Because the final win is still 100% and never hit the loss cut in past 10 years back test.
I think my mind is wrong, because I'm believing in back test.
It is very easy to avoid the dangerous pattern in the past for a system, but no one knows when will the new pattern happen.
For the cases you said in your experience, do they could easily pass the long term back test but could not survive in the real market?
Thanks again and best wishes for you,
Sky
you need trends with anti martingales. and trends are rare. so you will have many small losses and one big win
good luck with that
Thank you, Jean.
Trend with anti martingale should be very good.
I think I have to start a new topic for anti martingale, because I think we can combine both anti martingale and martingale but we have to calculate the size increase for them.
I'm totally agree with that point of view. I would like to add that :
- beyond "martingale", there's the need to add lots to a position
- beyond "hedging", there's the need to lock/reverse to your advantage a position
I think they shouldn't be considered as standalone strategies, they are not, they are technics and they have to be part of a higher context to be used
Thank you, dear Icham.
>> - beyond "martingale", there's the need to add lots to a position
I think when the trend is clear enough, we could use pure martingale. When the trend is not for sure, we could use add lots to position.
For example, I tried to use "pure martingale for sell" and "add lots for buy" for EURUSD before corona crisis. And I used to use pure martingale for buy for gold when market go crazy.
>> - beyond "hedging", there's the need to lock/reverse to your advantage a position
For lock position, I have to say yes, that is I think what we need to do.
But for reverse, I think it is dangerous in some case we use strategy based on long term back test. For example when we under crisis, market could go another way than we thought, but 2~3 weeks later, they always go back to normal. Because of it is difficult to know when the market will go back, pure reverse may dangerous sometime.
Forgive my newbie opinion.
And exactly as you said, they shouldn't be considered as standalone strategies, they are not, they are technics and they have to be part of a higher context to be used.
Thank you in advance and best wishes,
Sky
Thank you, dear Icham.
>> - beyond "martingale", there's the need to add lots to a position
I think when the trend is clear enough, we could use pure martingale. When the trend is not for sure, we could use add lots to position.
For example, I tried to use "pure martingale for sell" and "add lots for buy" for EURUSD before corona crisis. And I used to use pure martingale for buy for gold when market go crazy.
>> - beyond "hedging", there's the need to lock/reverse to your advantage a position
For lock position, I have to say yes, that is I think what we need to do.
But for reverse, I think it is dangerous in some case we use strategy based on long term back test. For example when we under crisis, market could go another way than we thought, but 2~3 weeks later, they always go back to normal. Because of it is difficult to know when the market will go back, pure reverse may dangerous sometime.
Forgive my newbie opinion.
And exactly as you said, they shouldn't be considered as standalone strategies, they are not, they are technics and they have to be part of a higher context to be used.
Thank you in advance and best wishes,
Sky
Skye i just got to warn you about the margin consumption of these technics - if you aware off and have a sufficient fund at your disposal then go on ...
Thank you for your continuing support, Icham.
I'd like to be safe and I want to avoid gambling.
The only purpose is to have fun to trade.
Thank you for your continuing support, Icham.
I'd like to be safe and I want to avoid gambling.
The only purpose is to have fun to trade.
yeah skye, that's because of people ignoring others experience that a law such as the ESMA has been voted : by <censored> & for <censored>.
they are hated everywhere on the scene, don't let us call you a <censored>.
yeah skye, that's because of people ignoring others experience that a law such as the ESMA has been voted : by <censored> & for <censored>.
they are hated everywhere on the scene, don't let us call you a <censored>.
Thank you for your advice so much, Icham!