statement ~Martingaling strategies don’t work
because eventually they crash the account~ correct??
Or is it possible mathematically that a forex system which uses a martingale / cost averaging
strategy can be made consistently profitable when combined with a sound market
entry logic and a limit on the number of martingaling trades
combined with good money management, good timing for market entry.
Or does using any form of martingaleing always
result in an account crash after a prolonged period of time.
iv used martingale and its nice to have with a strategy that has adaptation.
usually you never know the technical of a strategy until you've programmed a robot adviser
you do however have to look at it in this way.. you use a system that is raising the risk while your profits are all at risk the more you risk
rather than just percent of equity which is sound money management because it automatically adjusts
this only counts for the positive outcome, or in situations where you don't do the math.
if you do the math on forehand you can calculate what can happen on various occasions.
// Your Strategy Here...
// Close order
This is Math.
You know on forehand that your logic is programmed not to loose more then X on every trade.
So it is possible to calculate how many times you can hit a loss of X before your account 'crashes' as Roler100 puts it.
Now the outcome of your logic will depend on the size of X and on the strategy used on the occasions when your trade does not end up in a loss.
That part will depend on how you handle the winning trades,
How much bigger balance you have your against market in trillion so its a kind of gamble not a strategy.
"The system inherited it's name after John Henry Martindale, whose name was contorted. However, he didn't use this system himself, only encouraged players to use it in his casino. He wanted to lure players using simple system he thought was airproof. His casino was supposed to get in trouble and went bankrupt. This happened about 200 years ago. "
In a casino any player have a limit so maybe it works there but in Forex hard to beat market. Its possible trader with large account can beat market Maker broker but that kind of broker always set a maximum deposit limit+Stop Out Limit.
Limited martingale (say K doublings, when you have K+C doublings of free margin) with frequent withdrawals is perfectly fine. However, if you find you have to redeposit at any point, that's a sign that particular strategy has come to an end. Beware of ever using a signal that martingales though, especially if it's not being traded by the signal provider.
Yes and NO.
I do not believe you can actually stop a martingale strategy from blowing up an account. You can however successfully employ one to make consistent profits if you withdraw constantly. So you get many withdrawals from the account to take out profits until account blows up. Then you restart account again and cycle over and over again. In this way the profits you withdraw should be bigger that the account loss on blowup.