Why are people still using Martingale/Grid systems when its 90% chance of blowing your account?
I think it's all about the trading objectives and point of view of every different person. "90% of chance to blow an account" it's a random calculation.
There are some averaging systems that are constantly making profits since years. Anyway risks should never be hidden, anyone using them should be aware of the approach. But profits are real, and people investing a lot of money usually prefer this approach. Also, even if using a grid, a hard stop loss % on the equity can be used: you cut all trades and you can need few months to recover that. If the hard stop loss happens less than 2 times in a year, you are simply in profit.
Honestly, I never found someone handling millions of funds with a fixed SL/TP strategy.
Personally I don't like to have a system with fixed risk that can stay underwater for several months in a row, or even years.
Forex and CFD are high risk investments, if someone is ready accept a little % of gain at the end of year or even losses, he should probably focus on different kind of investments, more secure and with less intrinsic risk.
I'm studying and making researches since a lot of years, and I never found a strategy with fixed SL and TP and profit factor above 1.5 - 1.7. For me this is the limit, below these values there are no sense to trade forex&CFD in my opinion.
Am I missing something here? Genuinely curious why so many people still go for the smooth-looking systems when one bad sequence can wipe the account.
Basically it is a sign of incompetence. These systems are very simple and easy to create. You can take any non-edge, midiocre or even a losing strategy, slap on everaging or martingale and it gives the illusion of making profit and even with profit, the profit will be low compared to an system honest system with edge.
Personally I don't like to have a system with fixed risk that can stay underwater for several months in a row, or even years.
I have been following one of your signals for years now, just out of curiosity. Is'nt floating drawdown the same? You are under water for months now.
Anyways, i am not advocating hard SL/TP. One have to manage risk and there are tons of ways to go about it. Personally i do not like systems with a capped up-side and unlimited downside. Servicing floating drawdown is a waste of margin that could be utilized for making profit instead.
I have been following one of your signals for years now, just out of curiosity. Is'nt floating drawdown the same? You are under water for months now.
Basically yes, you are right. A drawdown is the same thing.
But I think that an averaging strategy have more possibility to survive markets even when the regime change. A fixed SL/TP strategy can become unprofitable from a day to another. An averaging system may increase its drawdown while preserving final expecatations.
I think it's all about how we want to take risk and manage it...
Anyway I agree with you that a grid can be based on a non-edge or random entry at all and looks profitable, but hardly a random system can survive to trade multiple pairs for multiple years, you can have just a lucky period to use it.
An averaging system may increase its drawdown while preserving final expecatations.
I think this is selfdeception considering when drawdown is uncapped the risk of losing the entire depsoit is real and if there is some sort of cap, then it can also happen that expectations can not be met.
Personally i think without averaging your system would have been more profitable. The curve would be more choppy and there would be months closed in losss, but in general you would be trading much larger volumes better utilizing your margin for actual trading instead of reserving it for tougher times. Take your other signal for example. A 30% loss, but already recovered.
I think it's all about how we want to take risk and manage it...
Indeed. In the end it all boils down to personal preferences and risk apetite which is diffrent for each and every person.
Personally i think without averaging your system would have been more profitable. The curve would be more choppy and there would be months closed in losss, but in general you would be trading much larger volumes better utilizing your margin for actual trading instead of reserving it for tougher times. Take your other signal for example. A 30% loss, but already recovered.
Your analysis is accurate and I agree, a different strategy that share entries but not do averaging can be interesting. I already started to make studies in that direction months ago.
This is the only way to proove if an averaging system have a real edge or survive market just thanks to averaging itself.
I think it's all about the trading objectives and point of view of every different person. "90% of chance to blow an account" it's a random calculation.
There are some averaging systems that are constantly making profits since years. Anyway risks should never be hidden, anyone using them should be aware of the approach. But profits are real, and people investing a lot of money usually prefer this approach. Also, even if using a grid, a hard stop loss % on the equity can be used: you cut all trades and you can need few months to recover that. If the hard stop loss happens less than 2 times in a year, you are simply in profit.
Honestly, I never found someone handling millions of funds with a fixed SL/TP strategy.
Personally I don't like to have a system with fixed risk that can stay underwater for several months in a row, or even years.
Forex and CFD are high risk investments, if someone is ready accept a little % of gain at the end of year or even losses, he should probably focus on different kind of investments, more secure and with less intrinsic risk.
I'm studying and making researches since a lot of years, and I never found a strategy with fixed SL and TP and profit factor above 1.5 - 1.7. For me this is the limit, below these values there are no sense to trade forex&CFD in my opinion.
The "2 stop losses a year" math is what worries me though. If each one cuts 40-50%, you're resetting most of the compounding that made grid look good in the first place. Looks fine in hindsight because the accounts that get hit twice before recovering just disappear from the conversation, survivorship bias basically.
My issue was never grid itself, it's when it gets sold as "low risk" because the daily curve is smooth while the real risk is sitting in a tail event nobody's seen yet.
On PF 1.5-1.7 as the ceiling, probably more broker/instrument dependent than a hard rule imo. Fixed-risk edges are thinner, sure, but at least the risk is priced in up front instead of showing up later as a recovery problem.
Think we agree on the important part though, risk should be visible before anyone actually uses the thing.
Basically it is a sign of incompetence. These systems are very simple and easy to create. You can take any non-edge, midiocre or even a losing strategy, slap on everaging or martingale and it gives the illusion of making profit and even with profit, the profit will be low compared to an system honest system with edge.
This is exactly it..
Averaging masks a mediocre or losing system as profitable, it doesn't create edge, it just delays the moment you find out you don't have one imo
My own system for example only trades 2-3 times a week, most people can't handle that or arent patience enough, they want daily action, and they definitely can't handle a few losing trades in a row even when the system is working exactly as designed.
I think it's all about the trading objectives and point of view of every different person. "90% of chance to blow an account" it's a random calculation.
There are some averaging systems that are constantly making profits since years. Anyway risks should never be hidden, anyone using them should be aware of the approach. But profits are real, and people investing a lot of money usually prefer this approach. Also, even if using a grid, a hard stop loss % on the equity can be used: you cut all trades and you can need few months to recover that. If the hard stop loss happens less than 2 times in a year, you are simply in profit.
Honestly, I never found someone handling millions of funds with a fixed SL/TP strategy.
Personally I don't like to have a system with fixed risk that can stay underwater for several months in a row, or even years.
Forex and CFD are high risk investments, if someone is ready accept a little % of gain at the end of year or even losses, he should probably focus on different kind of investments, more secure and with less intrinsic risk.
I'm studying and making researches since a lot of years, and I never found a strategy with fixed SL and TP and profit factor above 1.5 - 1.7. For me this is the limit, below these values there are no sense to trade forex&CFD in my opinion.
what averaging system is making profits since years? lets take the most famous bot quantum queen. No its not try it the strategy tester since 2022 it has blown the account in one of the years
They might be trading with money they can afford to lose, the positive linear balance curve might look good on paper, and they might not care about equity drawdown.
Gamblers be gambling. It's a standardized gambling system.
There is also a lack of trust in new systems, or those which are a black box.
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Genuine question for anyone running automated systems.
Why do people still buy grid or martingale EAs when most of us already know how these usually end?
The equity curve looks amazing at first. High win rate, tons of small wins, barely any red days. But the risk doesn't go away, it just gets pushed down the road. One strong trend or one bad news event and weeks of gains are gone in an afternoon.
I get why it's tempting though. Nobody likes taking a loss, and a system that keeps "recovering" feels safer than one that just eats a fixed SL. But avoiding losses and actually controlling risk are not the same thing, even if it feels like it in the moment.
I run the boring version myself on gold. One position at a time, fixed SL and TP, no averaging into losers, no lot multiplier, no hoping the market comes back. Lower win rate, normal losing trades, but I know exactly what I'm risking before I click buy.
Been live for a couple months now and honestly the boring part is what makes it easy to trust.
Am I missing something here? Genuinely curious why so many people still go for the smooth-looking systems when one bad sequence can wipe the account.