Is the Martingale really a trading strategy, or just a ticking time bomb?

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I’ve been analyzing automated systems for quite some time now, and there’s something that keeps catching my attention: many EAs show extraordinarily smooth curves, high win rates, and impressive growth using Martingale, Grid, or position recovery strategies.


The problem arises when the market enters a prolonged trend and the price simply doesn’t come back.


So I’m interested in hearing the real-world experience of those who’ve been working with EAs for years:

Do you think a truly sustainable Martingale strategy can exist in the long term if it has strict risk and drawdown limits?

Or do you believe that, regardless of the filters added, sooner or later a sequence will emerge capable of wiping out the account?


Personally, I’m increasingly interested in analyzing systems where profits come from the quality of the entry and defined risk management, rather than relying on recouping losses by increasing exposure.

What do you think? Would you use a Martingale EA today if its historical results were extraordinary?

 

There is no need to ask the people about it (because it will look as the self-promotion of the Market which is totally prohibited on the forum).
You can just follow some threads/articles/CodeBase (with open source)/etc where it was already discussed and elaborated for example:

------------------------------------------

Martingale, Hedging and Grid

The forum threads

  1. Martingale vs. Non Martingale (Simplified RoR vs Profit and the Illusions)
  2. Definition: classical martingale, progressive dynamic growth martingale, progressive static growth martingale, anti martingale or inverse martingale
  3. Martingale, Hedging and Grid : MHG
  4. Featured Martingale EA to explore and expand, provided by a programmer 
  5. Does a safe Martingale exist ?
  6. Why people are still trying Martingale Systems?
  7. The Video - Trading The Martingale and Anti Martingale Strategies

CodeBase

  1. Angry Bird (Scalping) - expert for MetaTrader 4 - the settings and trades - look at this post.
  2. Three Typical Candles Martingale - expert for MetaTrader 5
  3. iRSI Martingale 10 Levels - expert for MetaTrader 5
  4. Grid Semiautomat Panel - expert for MetaTrader 5
  5. HLine Greed Percent - indicator for MetaTrader 5
  6. Grid Template EA - expert for MetaTrader 4
  7. VR---SETKA---3_v2 - expert for MetaTrader 5
  8. Grid - script for MetaTrader 5
  9. KNUX Martingale - expert for MetaTrader 4
  10. MacdPatternTraderAll0.01. Time+Martingale - expert for MetaTrader 4
  11. Pure_Martingale - expert for MetaTrader 4
  12. Trend_Catcher - expert for MetaTrader 5
  13. Ingrid Martingale - expert for MetaTrader 5
  14. MultiMartin - expert for MetaTrader 5
  15. N trades per set Martingale - expert for MetaTrader 4 
  16. Martingale Smart - expert for MetaTrader 4 
  17. Reversing Martingale EA - expert for MetaTrader 5
  18. VR Calculate Martingale Lite - indicator for MetaTrader 4
  19. VR Calculate Martingale Lite MT 5 - indicator for MetaTrader 5 
  20. Hoop master 2 - expert for MetaTrader 5
  21. Martingale EA - expert for MetaTrader 4
  22. Simple candle filter martingale EA - expert for MetaTrader 4
  23. RSI Martingale - expert for MetaTrader 5
  24. more here

The articles

 

There's a big difference between using "blind" Martingale as a standalone trading strategy versus filtered scaling-in or averaging-in.

The former is a ticking time bomb while the latter is merely a position management component of a greater logical strategy that, presumably, already has a statistical edge to improve upon.

 

Same as every other strategy you need a solid ground to stand on.


If you have a scalping strategy and it doesn't have any edge, you will sooner or later die by a thousand cuts. Doesn't sound that pleasant to be honest.

If you are swing trading, you need to understand the fundamentals and build your positions. Else you can just as well roll a dice. Or maybe the price looks like its going up now, or wait...

if you are News trading, you need lightning speed in your fingers, a fast connection and preferably located in the building next to your brokers server. Pray to god could help, maybe cross your fingers at the same time too.

Price Action on a Futures platform. (maybe on some of the more advanced platforms that you need a bachelor degree in science to understand the settings). Hope you are ok with being fooled by spoofing now and again, or all the time.

Trend trading, when will the trend start and when will it end. Maybe use the old trustwordy moving average cross here and throw in some rsi to confirm it. Wait, what colors to use...

Range trading, its so easy in hindsight. If I only could go back in time or use one of those magical indicators that show exactly where I should open and close my trade, just not on a live chart apparently.

Grid trading, hope you know what you are doing. Specially if you combine it with some other strategy.

Hedge trading, as a forex trader you should maybe look into a different strategy instead. Just use your hedge knowledge and apply it in the same pair in one direction, making it nonhedge.

Mean reverting strategies, this can go so bad if you don't know what you're doing. Maybe combine it with the grid trading.


Which gets us to the famous Martingale. As Ryan said above "using "blind" Martingale / is a ticking time bomb", else its just fine...

 
Sergey Golubev #:

There is no need to ask the people about it (because it will look as the self-promotion of the Market which is totally prohibited on the forum).
You can just follow some threads/articles/CodeBase (with open source)/etc where it was already discussed and elaborated for example:

------------------------------------------

Martingale, Hedging and Grid

The forum threads

  1. Martingale vs. Non Martingale (Simplified RoR vs Profit and the Illusions)
  2. Definition: classical martingale, progressive dynamic growth martingale, progressive static growth martingale, anti martingale or inverse martingale
  3. Martingale, Hedging and Grid : MHG
  4. Featured Martingale EA to explore and expand, provided by a programmer 
  5. Does a safe Martingale exist ?
  6. Why people are still trying Martingale Systems?
  7. The Video - Trading The Martingale and Anti Martingale Strategies

CodeBase

  1. Angry Bird (Scalping) - expert for MetaTrader 4 - the settings and trades - look at this post.
  2. Three Typical Candles Martingale - expert for MetaTrader 5
  3. iRSI Martingale 10 Levels - expert for MetaTrader 5
  4. Grid Semiautomat Panel - expert for MetaTrader 5
  5. HLine Greed Percent - indicator for MetaTrader 5
  6. Grid Template EA - expert for MetaTrader 4
  7. VR---SETKA---3_v2 - expert for MetaTrader 5
  8. Grid - script for MetaTrader 5
  9. KNUX Martingale - expert for MetaTrader 4
  10. MacdPatternTraderAll0.01. Time+Martingale - expert for MetaTrader 4
  11. Pure_Martingale - expert for MetaTrader 4
  12. Trend_Catcher - expert for MetaTrader 5
  13. Ingrid Martingale - expert for MetaTrader 5
  14. MultiMartin - expert for MetaTrader 5
  15. N trades per set Martingale - expert for MetaTrader 4 
  16. Martingale Smart - expert for MetaTrader 4 
  17. Reversing Martingale EA - expert for MetaTrader 5
  18. VR Calculate Martingale Lite - indicator for MetaTrader 4
  19. VR Calculate Martingale Lite MT 5 - indicator for MetaTrader 5 
  20. Hoop master 2 - expert for MetaTrader 5
  21. Martingale EA - expert for MetaTrader 4
  22. Simple candle filter martingale EA - expert for MetaTrader 4
  23. RSI Martingale - expert for MetaTrader 5
  24. more here

The articles

Thanks for the links. I’m new to the platform and obviously have no way of knowing which topics have been discussed many times before.

I’m not promoting any product or signal. I’ve simply seen many EAs that promise capital recovery using the Martingale strategy, and I was interested in hearing other traders’ current opinions.

Is there a list of topics that shouldn’t be reopened, or any specific rules regarding issues that have already been discussed? If so, I’d appreciate a link so I can keep that in mind for future posts.

If not, I understand that I can start a general discussion about any strategy as long as I’m not promoting products or services.

Thanks anyway for the information and the links.

 
Ryan L Johnson #:

Existe una gran diferencia entre utilizar la estrategia Martingala "ciega" como estrategia de trading independiente y la estrategia de escalado o promedio filtrado.

La primera es una bomba de relojería, mientras que la segunda es simplemente un componente de gestión de posiciones dentro de una estrategia lógica más amplia que, presumiblemente, ya cuenta con una ventaja estadística que se puede mejorar.

Hi Ryan. Yes, I think I understand your point. What you’re saying is that the problem isn’t necessarily in increasing or averaging positions, but in doing so “blindly,” without a strategy that already has a statistical edge behind it.

I agree with you on that.

My issue with the Martingale has always been more emotional than mathematical. I tried it for a while and felt like I was playing with fire.

And even though you don’t see an EA trading in real time, and even if the system is perfectly on track, suddenly logging into your account and seeing a -10% loss can cause quite a bit of emotional turmoil.

That said, it also depends a great deal on the individual. If someone can maintain absolute composure, accept the worst-case scenario in advance, and that scenario still falls within their risk plan, then it’s probably just as viable as many other strategies.


Do you use any kind of Martingale or averaging-in in your systems? Or do you prefer something more conservative, where if the account drops, it does so gradually and in small increments?

How do you handle it?


 
Thomas Olof Gardling #:

Same as every other strategy you need a solid ground to stand on.


If you have a scalping strategy and it doesn't have any edge, you will sooner or later die by a thousand cuts. Doesn't sound that pleasant to be honest.

If you are swing trading, you need to understand the fundamentals and build your positions. Else you can just as well roll a dice. Or maybe the price looks like its going up now, or wait...

if you are News trading, you need lightning speed in your fingers, a fast connection and preferably located in the building next to your brokers server. Pray to god could help, maybe cross your fingers at the same time too.

Price Action on a Futures platfo

Thomas Olof Gardling #:

Al igual que con cualquier otra estrategia, necesitas una base sólida sobre la que apoyarte.


Si tienes una estrategia de scalping y no te da ninguna ventaja, tarde o temprano morirás lentamente. La verdad es que no suena nada bien.

Si haces swing trading, necesitas comprender los fundamentos y construir tus posiciones. De lo contrario, es como tirar los dados. O tal vez el precio parezca que va a subir ahora, o mejor espera...

Si operas con noticias, necesitas una velocidad increíble en tus dedos, una conexión rápida y, preferiblemente, estar ubicado en el edificio contiguo al servidor de tu bróker. Reza para que Dios te ayude, y cruza los dedos también.

Análisis de precios en una plataforma de futuros (quizás en algunas de las plataformas más avanzadas se necesite un título universitario en ciencias para entender la configuración). Espero que no te importe que te engañen con la manipulación de precios de vez en cuando, o incluso siempre.

Operando con tendencias, ¿cuándo comenzará y cuándo terminará la tendencia? Quizás podríamos usar el clásico cruce de medias móviles y añadir el RSI para confirmarlo. Un momento, ¿qué colores usar...?

Operar en rangos, ¡qué fácil es en retrospectiva! Ojalá pudiera retroceder en el tiempo o usar uno de esos indicadores mágicos que muestran exactamente dónde debo abrir y cerrar mi operación, aunque, por lo visto, no en un gráfico en tiempo real.

En el trading de cuadrícula, espero que sepas lo que estás haciendo. Especialmente si lo combinas con alguna otra estrategia.

Si eres operador de divisas y quieres usar coberturas, quizás deberías considerar una estrategia diferente. Simplemente usa tus conocimientos sobre coberturas y aplícalos al mismo par en una sola dirección, sin usar coberturas.

Las estrategias de reversión a la media pueden salir muy mal si no sabes lo que haces. Quizás deberías combinarlas con el trading en cuadrícula.


Lo que nos lleva a la famosa Martingala. Como dijo Ryan anteriormente, " usando la Martingala "ciega" /   es una bomba de relojería" , de lo contrario, está bien...

rm. (maybe on some of the more advanced platforms that you need a bachelor degree in science to understand the settings). Hope you are ok with being fooled by spoofing now and again, or all the time.

Trend trading, when will the trend start and when will it end. Maybe use the old trustwordy moving average cross here and throw in some rsi to confirm it. Wait, what colors to use...

Range trading, its so easy in hindsight. If I only could go back in time or use one of those magical indicators that show exactly where I should open and close my trade, just not on a live chart apparently.

Grid trading, hope you know what you are doing. Specially if you combine it with some other strategy.

Hedge trading, as a forex trader you should maybe look into a different strategy instead. Just use your hedge knowledge and apply it in the same pair in one direction, making it nonhedge.

Mean reverting strategies, this can go so bad if you don't know what you're doing. Maybe combine it with the grid trading.


Which gets us to the famous Martingale. As Ryan said above "using "blind" Martingale / is a ticking time bomb", else its just fine...

Hi, Tomas. Yes, of course! In this business, there’s no business without a plan—we totally agree on that.


I was just telling Ryan the same thing, and he said something similar to what you did.

My problem is that many years ago, when I started trading, the Martingale strategy was like the Holy Grail for constantly growing accounts… I tried it, and personally, it destroyed me emotionally. I couldn’t stand it, not even when I happened to win, haha. Every time I finished a session, I felt like I’d been run over by a truck.

And then I thought that with an EA, I could handle it completely differently since I wouldn’t be the one in front of the chart, but the truth is, no… Emotionally, for me, it was the same chaos.


As I was telling Ryan, I think it depends on each person, each personality, and as long as it’s part of a plan that can be executed with a cool head, sound judgment, and objectivity, it can work just like any other strategy. The key lies in the emotional resilience each person has when facing the situation. Because even though an automated system is doing the trading, logging into your account and suddenly seeing your balance down 10%—phew—can be tough. But maybe it’s just tough for me, and not for others.


Do you use any kind of Martingale or similar system? Or do you prefer something more conservative, where if the account balance drops, it does so only slightly?

I’d love to hear your opinion.

Best regards

 
Juan Andres Ruiz #:

Thanks for the links. I’m new to the platform and obviously have no way of knowing which topics have been discussed many times before.

I’m not promoting any product or signal. I’ve simply seen many EAs that promise capital recovery using the Martingale strategy, and I was interested in hearing other traders’ current opinions.

Is there a list of topics that shouldn’t be reopened, or any specific rules regarding issues that have already been discussed? If so, I’d appreciate a link so I can keep that in mind for future posts.

If not, I understand that I can start a general discussion about any strategy as long as I’m not promoting products or services.

Thanks anyway for the information and the links.

It is very difficult to miss such the topics and CodeBase entries and the articles. Because they (articles/Codebase/topics) are everywhere in the search and they are free (means: no need to go to the Market).

If you do not want to learn about what was happened before in this free coding (by source codes) and asking the "general question" so it looks like self-promotion which is prohibited on the forum as well.

-------------------

I will keep this thread to be opened as an example about the following: what the self promotion is in reality and why the Market sellers are doing it telling everybody that "we are not promoting anything" :)

 
Sergey Golubev #:

It is very difficult to miss such the topics and CodeBase entries and the articles. Because they (articles/Codebase/topics) are everywhere in the search and they are free (means: no need to go to the Market).

If you do not want to learn about what was happened before in this free coding (by source codes) and asking the "general question" so it looks like self-promotion which is prohibited on the forum as well.

-------------------

I will keep this thread to be opened as an example about the following: what the self promotion is in reality and why the Market sellers are doing it telling everybody that "we are not promoting anything" :)

Excuse me, are you making fun of me, or am I misinterpreting this?
 
Juan Andres Ruiz #:
Excuse me, are you making fun of me, or am I misinterpreting this?
Not.
I told you about self-promotion ... you do not care ... so I decided to keep this thread to be opened.
Because the users of this forum earn reputation in other ways (not by self-promotion).
 
Juan Andres Ruiz #:

Do you use any kind of Martingale or similar system? Or do you prefer something more conservative, where if the account balance drops, it does so only slightly?

I’d love to hear your opinion.



I could tell you, but then I would break forum rules...


Just listen to what Sergey is telling you instead.

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