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Why martingale EAs look profitable… until they aren’t (especially on gold) - page 6

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Ryan L Johnson #:

...

Edit: I do wonder whether everyone is reading the thread before posting. 🤔

In general, the minimum ratio between readers and writers on such forum is 10:1.
Vladislav Boyko #:
Your volume list isn't a money management strategy as long as it's open to interpretation. It's open to interpretation as long as the risk of the first order isn't known.
Although perhaps I'm too fond of specifics and strict rules. Well, nevermind.
Alain Verleyen #:
In general, the minimum ratio between readers and writers on such forum is 10:1.
at least 11:1 now :D
Ryan L Johnson #:

You're confusing a scaling-in feature with a Martingale strategy. In contrast to a Martingale strategy which is "blind", scaling-in can be incorporated into a strategy with proven entry conditions--if the original conditions remain valid, the underlying concept is adding to the position at a "discounted" price. Without those proven conditions, there is no statistical edge. Again, a gambler defined the Martingale strategy where it is not selectively applied.

On a related note... if you have to have a bipolar opposite of pyramiding, that opposite would more closely be scaling-in. They are both merely features/components.

I was referring to martingale only, which was the initial topic of this thread. In my personal opinion, all other discussion about scaling are out of topic here.

Also, a lot of people are actually confusing martingale with scaling (both in profits or in loss).

Fabio Cavalloni #:

I was referring to martingale only, which was the initial topic of this thread. In my personal opinion, all other discussion about scaling are out of topic here.

Also, a lot of people are actually confusing martingale with scaling (both in profits or in loss).

Maybe you could clarify the differences ?
Fabio Cavalloni #:
I was referring to martingale only, which was the initial topic of this thread. In my personal opinion, all other discussion about scaling are out of topic here.

Quoting the OP (emphasis added):

Forum on trading, automated trading systems and testing trading strategies

Why martingale EAs look profitable… until they aren’t (especially on gold)

Lucas Leguisamo Mallo, 2025.12.21 17:33

Over the years, I’ve tested and observed many Expert Advisors, especially on XAUUSD.
And there’s something that keeps repeating itself again and again.
Most EAs that show amazing backtests on gold rely on some form of martingale or grid logic. At first glance, everything looks perfect: high win rate, smooth equity curve, fast growth.
The problem usually appears later.
Gold behaves differently compared to most forex pairs.
It can trend aggressively, stay volatile for longer periods, and ignore “mean reversion” much more than people expect. When that happens, recovery-based systems stop recovering.
I’ve personally seen accounts survive for months and then get wiped out in a single bad week. Not because the strategy was unlucky, but because the risk model was fragile.
Lately, my focus has shifted toward much more conservative ideas:
no position stacking
no recovery systems
accepting fewer trades if conditions are not favorable
adapting stops and targets to volatility instead of fixed values
What surprised me the most is that when you remove the pressure to “always be in the market”, the overall behavior becomes much more stable — even if trading frequency drops significantly.
I’m curious to hear other perspectives here.
Have you had better long-term experiences with aggressive systems on gold, or did you also end up moving toward more conservative approaches?

Lucas Leguisamo Mallo:
Over the years, I’ve tested and observed many Expert Advisors, especially on XAUUSD.
And there’s something that keeps repeating itself again and again.
Most EAs that show amazing backtests on gold rely on some form of martingale or grid logic. At first glance, everything looks perfect: high win rate, smooth equity curve, fast growth.
The problem usually appears later.
Gold behaves differently compared to most forex pairs.
It can trend aggressively, stay volatile for longer periods, and ignore “mean reversion” much more than people expect. When that happens, recovery-based systems stop recovering.
I’ve personally seen accounts survive for months and then get wiped out in a single bad week. Not because the strategy was unlucky, but because the risk model was fragile.
Lately, my focus has shifted toward much more conservative ideas:
no position stacking
no recovery systems
accepting fewer trades if conditions are not favorable
adapting stops and targets to volatility instead of fixed values
What surprised me the most is that when you remove the pressure to “always be in the market”, the overall behavior becomes much more stable — even if trading frequency drops significantly.
I’m curious to hear other perspectives here.
Have you had better long-term experiences with aggressive systems on gold, or did you also end up moving toward more conservative approaches?
Martingale is profitable only if you have unlimited resources to keep betting. Personally i never understood why people focus on developing strategies based on this specific method. Most EA's that show amazing backtests because they are over optimized on past data but when the regime changes all fail because they cannot adapt to the new market conditions. In my trading i use classical trend following approaches. I used many new and hot methods but eventually all failed.
Daniel-gheorghe Muresan #:
Personally i never understood why people focus on developing strategies based on this specific method.

  1. A straight Martingale strategy creates the appearance of no losses.
  2. Largely unregulated broker-dealers accommodate such a strategy with high leverage.
  3. The strategy requires little to no market analysis.
  4. It's easy for Seller's to post cherry-picked backtest results.
  5. The overwhelming majority of traders are new traders.
  6. New traders simply haven't been around long enough to be critical (unless they already have the right mindset).
You’re spot on , aggressive martingale/grid EAs can look perfect until a single extended trend wipes accounts.
I’ve found that conservative, volatility-adaptive approaches.fewer trades, proper stops, no recovery stacking, create far more sustainable growth.
On gold, patience beats activity; sometimes doing less is actually more profitable long-term.

Let's say your account balance is 100,000

First loss 1000

Second 2000

Thrid 4000

5 8000

6 16000

7 32000

8 64000

9 128000


9 losses from deleting your acc

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