stevehopwoodforex.com
https://www.stevehopwoodforex.com/phpBB3/
Print view

martingale trading in the trend direction
https://www.stevehopwoodforex.com/phpBB3/viewtopic.php?t=2187		 Page 1 of 1
Author:  omadivi [ Thu May 23, 2013 10:41 am ]
Post subject:  martingale trading in the trend direction
i am seeing alot about the dangers of martingale trading and how it is a big loss at the end.
The reason a martingale fails is usually because the drawdown is not well managed. i have a manual martingale system i have been working on, it does well but i have not been able to carry out a long term backtest. i sent a pm to steve about a year ago concerning the creation of an EA, i never got a response.
the key is simple; martingale in the direction of the trend.
find trending pairs like the yen and aud pairs.
find an indicator the is reliable atleast 65% of the time.
use higher time frames.

the idea is to have just a single trade, if my system says buy, i place a buy trade. if the market turns and starts going bearish and i get a sell signal, if my buy trade is positive, i close it out and open a sell trade. if the buy is negative,i increase the lotsize on the sell. the profit from the sell cancels out the buy trade and moves me into profit. i can decide to close all trades at BE, or have a minimum profit target. of cos, my initial trade is at a small lotsize, and i dnt necessarily have to double the opposite trade.
Author:  xlitang [ Thu May 23, 2013 8:00 pm ]
Post subject:  Re: martingale trading in the trend direction
If you stuck in range market, what happened?
Author:  garyfritz [ Thu May 23, 2013 8:28 pm ]
Post subject:  Re: martingale trading in the trend direction
Martingales are the perpetual-motion machines of the trading world. They claim to give you something for nothing -- guaranteed good and steady winning results. It doesn't work that way. (Which is probably why Steve ignored your request. He doesn't like Martingales any better than I do.)

Your Martingale might work better than others, but it still has the weakness of any Martingale: the increasing size when you guess wrong. Reversing with a larger size just "delays" the loss. If you come up with a win, then everything's wonderful. But if you don't, then you have escalating risk. If you don't have infinite funds, at some point you have to give up and take a huge loss.

And even if you DO have infinite funds, you're taking on huge risks for tiny profits. You get a lousy return on your infinite account.

Martingales "kick the can down the road," pushing the losses away and sweeping them under the rug with larger trades. But sooner or later they will blow up on you. If your luck is like mine, it will be sooner.

Just Say No.
Author:  SteveHopwood [ Thu May 23, 2013 10:56 pm ]
Post subject:  Re: martingale trading in the trend direction
garyfritz wrote:Martingales "kick the can down the road," pushing the losses away and sweeping them under the rug with larger trades. But sooner or later they will blow up on you. If your luck is like mine, it will be sooner.
I have an oft-repeated mantra (ok, granted not so much of late because people are starting to get the message, but previously); in Forex trading, if it can happen and it is bad for you, then it will happen, and probably sooner rather than later. The reason - the crims will make it happen to you so they can pocket all your deposit.
Just Say No.
This is a phrase that was also applied to an anti-drugs campaign here in the UK a few years ago. We are talking highly-addictive, toxic, life-destroying drugs. Martingale is the Forex equivalent.

omadivi, you are one of the luckiest noobs in the whole history of retail Forex trading. You have happened on the forum where the best brains in the business are offering you on a plate entire trading methodologies.

Only an idiot spurns the advice on offer here and goes down the Martingale route.

There is an entire Welcome post here telling you where to go for the best of all possible advice. I have sent you a Welcome message describing where to go for the best of all possible advice.

Follow it or loose all your money. The choice is yours of course, but only someone who is really stupid ignores the fantastic advice on offer here.

:D
Author:  nonlinear [ Fri May 24, 2013 2:25 am ]
Post subject:  Re: martingale trading in the trend direction
It is quite amazing to see that, isn't it? That curve seemed to defy gravity where others had failed.

The way I look at it is, even non-Marty systems eventually fail, just with less spectacular notice.

Non-marty is in high heels, looks fabulous, but slowly sucks the cash out of you. You try to make it work with her because her history just looks so darn good. Initially, she starts turning around, you feel happy, then slowly she is emptying you like a slow bleed until you leave in frustration.

Marty on the other hand is much smarter and likes to go for the fast kill. She doesn't give a sheet (like the honey badger), smacks you in the face, and you look back and say what happened, where is my money? No prenup here.

Take notice, take profits, deposit elsewhere, and trade another day....
Author:  nonlinear [ Fri May 24, 2013 3:15 am ]
Post subject:  Re: martingale trading in the trend direction
My view is that Marty based systems will fail, no doubt, sure as the sun rises. Now non Marty systems with modified Marty money techniques are possible. Jose knows, but it is a delicate balance. That is what Jose is pushing for now, it appears to me. For example, one could have a long term system with a positive expectancy that enters into to trades in one direction with Marty techniques so long as the entry criteria are still valid. Once the exit criteria hits though, the loss is booked. That is my theory anyway.
Author:  omadivi [ Fri May 24, 2013 7:08 am ]
Post subject:  Re: martingale trading in the trend direction
thank you all for the input. it is appreciated. i am going to have a look at that welcome message from steve.
Author:  omadivi [ Fri May 24, 2013 7:19 am ]
Post subject:  Re: martingale trading in the trend direction
garyfritz wrote:
Your Martingale might work better than others, but it still has the weakness of any Martingale: the increasing size when you guess wrong. .
hi garyfritz,

my entries are not guesses, that is the reason i opted to use a 1hour chart. and i believe MAs are really the simplest and best indicators to use.
i know martingale trades can "waste" time, especially when you've got several trades tied down.
i know all the risks involved, and am happy to find out more. everyone says martinagle systems are dangerous, i agree. but most martingale traders go against the trend. the reason i wanted an EA was to see its performance over time. A martinagle system cant destroy your account if your exposure is contained. i opened a demo account and hooked it up to a trade explorer on FF, i will continue trying it out.
Author:  omadivi [ Fri May 24, 2013 7:21 am ]
Post subject:  Re: martingale trading in the trend direction
xlitang wrote:If you stuck in range market, what happened?
i am looking to go with the trend, so i will not add to trades that are already close together.
Thinking about it, i think this system is better traded manually.
All times are UTC Page 1 of 1

Powered by phpBB® Forum Software © phpBB Limited