DislikedPS) A martingale hedge is an "always in the market strategy." There is a nice explanation of the strategy by FXTradePro called "FXTradePro - Semi Martingale" with good pictures, though his entry approach is discretionary.Ignored
The system does not have to be always in. You could place trades weeks apart from one another, but using the adjusted lot size depending on what the TP/SL is, and still follow the rules of the system.
FxTraderPro just structured his method to play a breakout of a tight range. Someone trading MA crosses, RSI bounces, or any other method could still implement the same money management presented in the semi-martingale thread.
What your posts bring up, though, is that a more important way to judge the insurance of a system is strictly by it's money management. If the money management is strict enough and can feasibly account for sigma 5-9 scenarios on paper, then almost any reasonable system should be able to be traded to profit. The idea is we can probably trust a system without doing extensive forward testing so long as the system can handle 20 or more SL's in a row without much DD or a margin call. I guess this depends on the MM, as a strict 1:1 R/R with no variance in possible profit would ultimately fail with terrible win ratio's.
This is why there is truth in the idea of 'let winners run and cut the losers.' It can be difficult to overcome a string of losers with strict TP goals or position sizes. Or simply, make sure the winners are bigger than the losers. This is moving the thread in a new direction, but to keep it on track I would say that we can generally trust a system that has variable profit goals. If the system is designed on paper to have variable position sizes or larger TP than SL requirements, then the system inherently has a propensity to be profitable when it can survive sigma 5+ scenario's.
I guess that argues the idea of not needing to forward test at all. Again, I mean this in the aspect of a reasonable system. I'm not talking about a system that has 300 TP, 3 SL with 2+% risked in those 3 pips. It's not as simple as that.