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Does the martingale system really work?

  • #241
  • Nov 24, 2013 2:20pm Nov 24, 2013 2:20pm
Quoting Master_kiwa
{quote} Thank you again for your constructive post. Glad to see you can actually provide proof of how poor spelling ability relates to forex.

Master Kiwa I remember you from your journal....but you now have all time return of -98% ? and you use martingale?
  • #242
  • Nov 24, 2013 3:20pm Nov 24, 2013 3:20pm
Quoting Vitez
{quote} Master Kiwa I remember you from your journal....but you now have all time return of -98% ? and you use martingale?
This is the ultimate result of holding losers. Compounding them is an even bigger mistake.
  • #243
  • Nov 24, 2013 6:09pm Nov 24, 2013 6:09pm
Quoting Master_kiwa
{quote} It all goes back to the system which one uses. By you simply calling 1m a fast - paced action, clutter from HF trading robots, super - tight stops, high spread, etc would lead me to believe that you have taken a pounding using the 1m.
A pounding is perhaps a little extreme, but yes, I did at one point trade on the 1-minute (or 5-minutes, it's pretty much the same from my perspective) time frame, and I did not fare well. Now, I'm not saying people should not trade on the smallest TFs ; I'm sure some veteran traders are doing very well for themselves there. It's just not for me (nor, I believe, other beginning traders). I'm more comfortable on the higher TFs, where trends, R/S lines/areas, setups, etc. appear with much more clarity. On top of that, trading on higher TFs keeps me from over-trading, which I believe to be a good thing. Finally, once I've identified a good setup, I can switch to lower TFs (generally no lower than H1/m30) to fine tune my entry using 'local' R/S.
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1M creates everything you see (or think you see on the higher tf). Breakouts occur at the start of a fresh 1m candle, unlike the very same breakout which you HTF groupies see.
Higher TFs have the benefit of removing market noise/clutter ; all the false breakouts from the lower TFs are drowned by the larger TF trend. In the end, where you might trade 100 so-called 'breakouts', I'll only trade 1, but with a much bigger probability of success. Sure, I'll miss potential winners, or I'll get into a winner slightly later than you would, but I'll also stay out of a lot of bad trades.
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The spread is the same on higher tf as it is on the lower tf not to mention to pay more commission from holding a position over night (swap) compared to if you scalped your transaction.
Sorry, but that is very wrong. Hanover pointed out why already - on higher TFs, your setup (SL & TP) are much bigger in comparison to the spread, so the latter's importance becomes almost negligible.
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Yet let us get back to martingale. You mentioned the more trades you placed the better chance you have of eventually encountering that deadly streak. Well how you can mention that as a mathematical fact with using mmmmmmmm errrrrrrr MATH (statistics)!
Because it is a mathematical fact. The longer a series of trades is, the better chance you have of encountering a streak of n losses. You might not agree to it, you might not like to hear it, but it's a fact just as much as 2+2 = 4.
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Once again it all boils down to the system which one uses. As the system will determine you probability of how long your losing streak will be, not martingale itself.
No system can accurately predict the occurrence (or lack thereof) of a particular streak of wins or losses over an infinite number of trades. The risk of ruin used by MyFXBook is based on your performance so far, over a data set that's often meaningless. The particularly vicious thing with a Martingale is, it might appear to work, until it doesn't. Just because so far you haven't encountered the streak that will doom you doesn't mean you won't encounter it eventually. Even worse, as stated above, the longer you try, the better your chances of eventually getting busted by that streak.
Your approach reminds me of a story/joke, about a guy jumping off of a roof. Guy drops down, and on the way down he keeps saying 'so far, so good'. Guess how the story ends?
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Martingale is simple a method of wagering, not a method used on determining what direction the market will go. So let us use stats. The picture below is of a trader who is much better then all of us. Especially those who claim that trading is only luck. Have a look at this traders risk of ruin. myfxbook calculates your risk to ruin on several factors. If this guy used martingale it would be clear to see that after every loss his possibility of having that winning trade is actually increased, not decreased as some of you pessimistic trolls contend....
Again, so far, so good. I can come up with several examples of people using such systems, doing absolutely amazing just like in your example, until they met their doom. Splat.
  • #244
  • Nov 24, 2013 8:29pm Nov 24, 2013 8:29pm
Quoting Vitez
{quote} Master Kiwa I remember you from your journal....but you now have all time return of -98% ? and you use martingale?
Actually now the account posted on the trade explorer was that of only commission earned from the traders of others. I am now a full time binary options trader. 81 - 85% payouts using the 1 - 5 min function to me is much better then using the mt4. I simply wait for my formations and put or call. By the way I use Martingale with the binary options. I have yet to experience more then 5 consecutive losses.
  • #245
  • Nov 24, 2013 8:41pm Nov 24, 2013 8:41pm
Quoting Jexter
{quote} A pounding is perhaps a little extreme, but yes, I did at one point trade on the 1-minute (or 5-minutes, it's pretty much the same from my perspective) time frame, and I did not fare well. Now, I'm not saying people should not trade on the smallest TFs ; I'm sure some veteran traders are doing very well for themselves there. It's just not for me (nor, I believe, other beginning traders). I'm more comfortable on the higher TFs, where trends, R/S lines/areas, setups, etc. appear with much more clarity. On top of that, trading on higher TFs...
Very good to see that you can count. 2 + 2 = 4 which is a mathematical fact. Yet martingale alone has no statistics which can be proven as fact. Nor can anyone give a mathematical statistic of something which has yet to occur. You speaking about someone having a big enough losing streak which would clean their account is an exaggeration. As you aren't factoring in the system he/she is using, and if the person has self - control after the losing trade. In order words you system is what will determine your probability of success or failure. Not simply doubling your lot size after a loss. I am sorry to hear that you have failed at the 1m, which is why you have settled for the higher tf. It is rather sad to know that you are blind to the fact that what occurs on the higher tf occurs on the smaller tf. Main difference is that on the lower tf they ( patters, and trends) appear with more frequency.
Nothing is 100%. Yet in forex you don't need it to be 100% in order to have overall profit! You can have a 50% win ratio and still bank 100% profit! The reality is if a person is trading well with martingale, he or she should be withdrawing the profit as that is the best money management technique of them all. Being pessimistic as you are only boost your ego. You know the part of yourself which says " I TOLD YOU SO" when someone fails, when the reality is you trade just as bad as the person you're giving the advice to. Try giving the 1m tf a try again. Don't be a quitter. I believe in you.
  • #246
  • Nov 24, 2013 8:48pm Nov 24, 2013 8:48pm
Quoting Master_kiwa
It is rather sad to know that you are blind
You are blind to the simple fact that nobody with an edge would endanger their account with silly little martingale games.
Congratulations ScalaFX for coming out of the closet!
  • #247
  • Nov 24, 2013 8:51pm Nov 24, 2013 8:51pm
Quoting Vitez
I keep wondering why did Martingale become so famous if his method sucks?
It isn't a method which sucks. It is simply a method of wagering which would dramatically recover your previous losses with 2-3 consecutive wins. In forex it is much harder to calculate the effectiveness of using the martingale as everyone's systems are different. Even if you were using the same system, people would have different stop losses or take profits which could be missed by 1 pip and could turn what would of been a 400 pip profit to a -400 loss. In casino either you win or lose. If you're playing roulette it is either black red or green. You can't miss a win by a pip. In forex you can have a person who was aiming for say 300 pip profit. The currency went in his direction say 275 pips. Yet, because his system says that 300 is a strong price to take profit he waits. Then before you know it a 275 pip winning position turns into a big fat red! Which in turn gives you a loss using the martingale form of wagering.The reality is no win or losing streak will last forever. You eventually will run into a reversal. That is the only thing martingale guarantees you.
  • #248
  • Nov 24, 2013 8:55pm Nov 24, 2013 8:55pm
Quoting nubcake
{quote} You are blind to the simple fact that nobody with an edge would endanger their account with silly little martingale games.
That is your bias opinion noob cake. You have tons of people who have used martingale who are winning and losing with it. Just as you have tons of people who are winning and losing without using it. I'm simply saying that a person who has an excellent system would be rather brain dead to not use it. It as if I tell you. Buy no more then 10 tickets. One of the tickets will be a winner. For ever 1 dollar you spend on the ticket the winning ticket will multiply your investment 81%. Only a fool will wager the same amount of money after buying a losing ticket. I have seen guys who have a 97% hit rate! Look at the pamm leader on hotforex.com he doesn't have to use martingale because he almost never has 3 straight losses. Well for those of us who can encounter a few losses martingale makes sense, as you won't lose for ever!
  • #249
  • Edited Nov 25, 2013 3:17am Nov 24, 2013 9:16pm | Edited Nov 25, 2013 3:17am
Quoting Master_kiwa
{quote} Very good to see that you can count. 2 + 2 = 4 which is a mathematical fact. Yet martingale alone has no statistics which can be proven as fact.
Wrong. https://en.wikipedia.org/wiki/Martin...tical_analysis

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Nor can anyone give a mathematical statistic of something which has yet to occur.
Wrong again. It's called Probability and it's a whole field of study by its own self.

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You speaking about someone having a big enough losing streak which would clean their account is an exaggeration. As you aren't factoring in the system he/she is using, and if the person has self - control after the losing trade. In order words you system is what will determine your probability of success or failure. Not simply doubling your lot size after a loss.
The concept of a Martingale is to double your 'bet' after every loss, and scale back to your original 'bet' after a win. While every trade has different characteristics, there are only a number of limited ways in which you can double your bet:
- doubling the volume of your trade while keeping your TP and RR the same
- doubling your RR while keeping your TP and volume the same (i.e. tightening your SL by half)
- doubling your TP while keeping your RR and volume the same (so you double your SL as well)
- or a mix & match of all of the above, the end point being that you double your exposure regardless of which factor you choose to modify

Now, I understand that your system has its own entry characteristics. I'm not expecting you to enter trades on impulse. I'm not even doubting your ability as a trader. However, as able as you might be, on any given trade, you cannot guarantee that you will come out a winner. Hence the possibility exists that you might run into a losing streak, each time doubling your market exposure.

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I am sorry to hear that you have failed at the 1m, which is why you have settled for the higher tf. It is rather sad to know that you are blind to the fact that what occurs on the higher tf occurs on the smaller tf. Main difference is that on the lower tf they ( patters, and trends) appear with more frequency.
Don't be sorry! I'm actually perfectly happy to trade on higher TFs. I find it much more peaceful & relaxing. I don't have to be glued to my screen watching charts 24/7, it keeps me from entering trades I shouldn't even consider, and it allows me to pursue other endeavors. As for setups appearing on lower TFs with higher frequency, I already answered that in my previous post. In short, I value quality over quantity.

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Nothing is 100%. Yet in forex you don't need it to be 100% in order to have overall profit! You can have a 50% win ratio and still bank 100% profit! The reality is if a person is trading well with martingale, he or she should be withdrawing the profit as that is the best money management technique of them all.
I can only agree with that part (well, except for the part of Martingale being the best MM technique, obviously).

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Being pessimistic as you are only boost your ego. You know the part of yourself which says " I TOLD YOU SO" when someone fails, when the reality is you trade just as bad as the person you're giving the advice to. Try giving the 1m tf a try again. Don't be a quitter. I believe in you.
I am not pessimistic at all. Quite the opposite really. And my goal is not "I told you so". Hell, I hope Martingale works out for you, I don't bear any ill will towards anyone - why would I? I haven't at any point judged your ability at trading, and frankly I don't give a rat's ass what you think of my own ability.

However, yes, I am annoyed when I see people promote - in a newcomer section, no less - a strategy that's been mathematically proven to be a loser. That pisses me off.
  • #250
  • Nov 24, 2013 10:13pm Nov 24, 2013 10:13pm
Quoting Master_kiwa
{quote} Very good to see that you can count. 2 + 2 = 4 which is a mathematical fact. Yet martingale alone has no statistics which can be proven as fact. Nor can anyone give a mathematical statistic of something which has yet to occur. You speaking about someone having a big enough losing streak which would clean their account is an exaggeration. As you aren't factoring in the system he/she is using, and if the person has self - control after the losing trade. In order words you system is what will determine your probability of success or failure....

Finally, someone that actually sees the light .. Don't worry Master_kiwa , most people won't get what you are saying because they are so close mined and they probably have small accounts.. A person with a decent size account and decent trading strategy could make martingale work.. They fail to realize its not martingale you should worry about but its the trading strategy you should worry about… Put it this way, I will give you an example… Lets say that you are a horrible trader and for every 10 trades you only win one time … If you have a decent size account you can still be a profitable trader only winning once on every 10 trades.. But this is the worst case scenario… There are plenty of strategies that will give you less loses in the row.. you just have to do your research your buddy.. Now if you aren't able to win once out of every 10 trades you take then you should go get a 9 to 5…
  • #251
  • Nov 24, 2013 10:40pm Nov 24, 2013 10:40pm
Why is it that everyone who loves martingale and no stops and all things rookies do are seemingly unable to spell or write coherent sentences?

Why is it that they also seem to love giving "examples" that usually go along the lines of "let's say you lose 9 times in a row"?

Oh, now suddenly it's not martingale that matters. No, it's the STRATEGY! (But, of course if anyone has a winning strategy then all of their money management would be designed to protect their capital, not dump it all into the market hand over fist hoping for a win).

My goodness some of you are certifiable.
Congratulations ScalaFX for coming out of the closet!
  • #252
  • Nov 24, 2013 10:40pm Nov 24, 2013 10:40pm
Quoting focusonmoney
{quote} Finally, someone that actually sees the light .. Don't worry Master_kiwa , most people won't get what you are saying because they are so close mined and they probably have small accounts.. A person with a decent size account and decent trading strategy could make martingale work.. They fail to realize its not martingale you should worry about but its the trading strategy you should worry about… Put it this way, I will give you an example… Lets say that you are a horrible trader and for every 10 trades you only win one time … If you have...
Well I'm glad to find someone who is like minded. It is much easier for people to say " It won't work" compared to saying "It will work, if you do this". People like to use probability instead of focusing on reality. I can win 98% of my trades and still margin call. While have a 50% win % and turn 1000% profit.
  • #253
  • Nov 24, 2013 10:45pm Nov 24, 2013 10:45pm
Quoting nubcake
Why is it that everyone who loves martingale and no stops and all things rookies do are seemingly unable to spell or write coherent sentences? Why is it that they also seem to love giving "examples" that usually go along the lines of "let's say you lose 9 times in a row"? Oh, now suddenly it's not martingale that matters. No, it's the STRATEGY! (But, of course if anyone has a winning strategy then all of their money management would be designed to protect their capital, not dump it all into the market hand over fist hoping for a win). My goodness...
Ohhhh Mr PattyCake. If you feel that martingale itself is all you need then you are clearly insane. Since you have a fetish for grammar why don't you become a grammar teacher for openenglish.com For traders your system is your bible. If your system is dead on, and you don't experience many consecutive losses why wouldn't you wager more? Nubcake contends that martingale doesn't work because losing streaks don't have a definite end. Yet, we do know that no winning or losing streak last forever. Yet Martingale won't work for nubcake, because the highest lot siZE he can place is .01 anyway.
  • #254
  • Nov 25, 2013 1:02am Nov 25, 2013 1:02am
Quoting Jexter
{quote} Wrong. ......
Alas, there's no point in sharing good wisdom with folk who don't want to learn, especially if they're merely looking to argue or trade insults. The drawbacks to martingale, including the bulletproof mathematical considerations, have already been discussed in this, and other, threads. However, it seems that many folk need to discover things for themselves, and learn from their mistakes. As indeed we all do.
  • #255
  • Nov 25, 2013 4:44am Nov 25, 2013 4:44am
Quoting hanover
{quote} Alas, there's no point in sharing good wisdom with folk who don't want to learn, especially if they're merely looking to argue or trade insults. The drawbacks to martingale, including the bulletproof mathematical considerations, have already been discussed in this, and other, threads. However, it seems that many folk need to discover things for themselves, and learn from their mistakes. As indeed we all do.
You're probably right. Why bother after all, it's his good money, not mine, and indeed nothing beats personal experience. Cheers
  • #256
  • Nov 25, 2013 4:59am Nov 25, 2013 4:59am
Simply martingale system works in 15 pips pegged currency pair somebody find lists of pegged pairs to flip a coin
  • #257
  • Nov 25, 2013 6:06am Nov 25, 2013 6:06am
I love these guys with the +10 vochs. They seem to know it all. Yet, they never seem to have a trade explorer to they are actually good at what they do, or at least what they claim to do.
  • #258
  • Nov 25, 2013 6:29am Nov 25, 2013 6:29am
Quoting Master_kiwa
I love these guys with the +10 vochs. They seem to know it all. Yet, they never seem to have a trade explorer to they are actually good at what they do, or at least what they claim to do.
People of a certain level of intellect can tell who does, and who does not, know what they are talking about.

Just because you are too dumb to smell how bad your text is doesn't mean others can't tell that some of us are a little more clever and insightful than you'll ever be.

If you were to hear a university lecturer speak would you be such a fucktard as to demand to see his credentials? Don't be jealous that some of us aren't sheep who blindly follow, and are capable of displaying seemingly basic levels of reasoning.

You really do just sound astonishingly stupid.
Congratulations ScalaFX for coming out of the closet!
  • #259
  • Nov 25, 2013 6:40am Nov 25, 2013 6:40am
Quoting Master_kiwa
I love these guys with the +10 vochs. They seem to know it all. Yet, they never seem to have a trade explorer to they are actually good at what they do, or at least what they claim to do.
trade explorer? do you have one ? connect that your signature
  • #260
  • Nov 25, 2013 7:25am Nov 25, 2013 7:25am
Quoting Master_kiwa
I love these guys with the +10 vochs. They seem to know it all. Yet, they never seem to have a trade explorer to they are actually good at what they do, or at least what they claim to do.
Hanover has been around this forum for a number of years and is in my opinion undoubtedly one of the best people here to explain probability and statistics. He has a very strong understanding of mathematics and he's proven this through his numerous insightful posts - his vouches aren't for no reason. Listen to him, he's right.
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