Does a safe Martingale exist ? - page 17
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GJ
what i understand till now,there are two types of martingales.
1-the first part of system open a trade in trend direction,if first open trade was buy but unfortunately price move down side and the trade turn in loss,so at every specified level the system open one next/more trade with double size or some extra percent of first trade size in first trade direction though trend is going opposite side and so on going in expectation when price will got back as prices always runs in cycles/retrace) the take profit is triggered....... keep in mind,the TP is moving behind the price as as next trades are increased volume wise for to be fast/early triggered.
2- the second part of martingale is,it open every next trade in opposite direction if first trade turn in loss because of opposite trend accure.
and in every martingale, first system detect trend and open first trade in trend.
it is up to you,you say it money management or a trading system.of course some martingale have stop loss levels but not all.
and yes we needs your first hand experience and comments for to know and understand more.
regards
I know also a martingale against the trend, hoping that it will turn. Progressive lot raising or not. And a martingale in trend and with system is positioning, not progressive.
Correct. The reality is martingale gets a bad name because most people who use it don't really have a "system". They simply have a bias, and as the trade goes against them they keep adding to the position.
Correct. The reality is martingale gets a bad name because most people who use it don't really have a "system". They simply have a bias, and as the trade goes against them they keep adding to the position.
Which one system or martingale you are working/trading on,you talked in your previous posts,if that is not a secret or commercial kinda :) ..... i want a look at ..... currently i am trying to understand "pipmaker v1.2.1 nmc" how it works,what and how it locate trend and how other features working.
regards
Which one system or martingale you are working/trading on,you talked in your previous posts,if that is not a secret or commercial kinda :) ..... i want a look at ..... currently i am trying to understand "pipmaker v1.2.1 nmc" how it works,what and how it locate trend and how other features working.
regards
Well it is no secret at all. What is a secret is the system I am using. lol
You can see the trades here ; http://tinyurl.com/zlpcgey
Well it is no secret at all. What is a secret is the system I am using. lol
You can see the trades here ; http://tinyurl.com/zlpcgey
I prefer to call Martingale a betting system rather than a money management system. If you use an EA that just open buy order blindly with TP == SL, you will get a 50% win rate. Where market goes down it will not change too much! Win rate would be around 40 to 45%. Using indicators do not change it dramatically. At best adds 3 to 5% to your win rate, not better than coin toss. A perfect random walk? Maybe. So it seems Martingale is applicable easily. But No!
The problem with Martingale bets are rare circumstances. This rare circumstances unfortunately have a fat tail statistically. They occur more than they should! The Price Trapping Strategy with a win rate around 50% (it is a blind strategy) in 95% of cases has 2-3 consecutive loss which is perfect for Martingale betting. However once or twice a year it reaches to 7-9. If you survive rare cases it is Holy Grail! It is almost same problem with all Martingale betting systems which are countless. Works perfect until a rare event. Rare event can be a strong trend without retracement , a range volatile market, a flat volatility free market and ... You can add more killer rare cases.
Best,
I prefer to call Martingale a betting system rather than a money management system. If you use an EA that just open buy order blindly with TP == SL, you will get a 50% win rate. Where market goes down it will not change too much! Win rate would be around 40 to 45%. Using indicators do not change it dramatically. At best adds 3 to 5% to your win rate, not better than coin toss. A perfect random walk? Maybe. So it seems Martingale is applicable easily. But No!
The problem with Martingale bets are rare circumstances. This rare circumstances unfortunately have a fat tail statistically. They occur more than they should! The Price Trapping Strategy with a win rate around 50% (it is a blind strategy) in 95% of cases has 2-3 consecutive loss which is perfect for Martingale betting. However once or twice a year it reaches to 7-9. If you survive rare cases it is Holy Grail! It is almost same problem with all Martingale betting systems which are countless. Works perfect until a rare event. Rare event can be a strong trend without retracement , a range volatile market, a flat volatility free market and ... You can add more killer rare cases.
Best,
The reality is "real events" wipe out most accounts even when they aren't using martingale, However, a system which is based off of "real price action" and not this "crystal ball high time frame trading" will almost always never be effected by "rare case events" as when you scalp, you already have a set sl which isn't very far at all from your entry. I think threads like this get way to much into theory and not enough into reality. If a system has no more than 4 straight losses, you would be stupid to not use martingale money management.
I also don't see why you call martingale a "betting system" when we as traders "BET" everytime we place a trade. I reckon that you are using the casino term of martingale, which isn't the same as martingale money management because most of us have a plan on how it is we are going to use martingale.
When we talk about Martingales, the crux is to 1st start off by relating with PDFs or there will be meaningless talk. Under a Gaussian Distribution, which assumes I.I.D conditions (independent, identically distributed data), mean reversion of movements is very likely to take place & continuous movements are very rare. Here, a Martingale works better, with risk of extreme events reduced. However, as we all know, the financial markets have fat tails. The degree of fat tails is debatable with more robust methods of calculating kurtosis, but there is a definite amount of fat tails certainly. Under this situation, a normal martingale here gets more risky as price directions & losses can become very time-extended for long periods of time.
Second, given the condition of general (but not very long) persistence in market states (not volatility), it makes alot more sense to bet using an anti-martingale instead.
Third, systems are not I.I.D certainly. They contain user-defined characteristics depending on the indicators present in the system. The success of a martingale depends on the edge of the system too. If your system has no edge, the presence of a martingale will only lengthen the time before your account drops. With an edge, it can be possible to have a system using martingale. & that is because you have left the random/Gaussian PDF behind by applying the Martingale to your system's Probability Distribution Function of wins and losses.
Hope this clarifies the issue as to why some people have used Martingales successfully over multiple years while others have not.
Yours sincerely,
Wintersky
The theory of martingales plays a very important ans ueful role in the study of stochastic processes. A formal definition is given below.
Definition 5.1. Let (,F, P) be a probability space. A martingale sequence of length n is a chain X1,X2, · · · ,Xn of random variables and corresponding sub -fields F1,F2, · · · ,Fn that satisfy the following relations