Does the martingale system really work? | Page 24 | Crypto Craft

Options

Go to
Permalinks
Print Thread

Similar Threads

Martingale, Anti-martingale, and Compounding 40 replies

Martingale, Reverse Martingale, Modified Martingale, Maths 1 reply

How to change this Martingale to Reverse Martingale ? 3 replies

Martingale vs. Non Martingale (Simplified RoR vs Profit) 1 reply

Does this simple system by Richard Donchian really work? 134 replies

Attachments: Does the martingale system really work?
Exit Attachments

Does the martingale system really work?

  • #461
  • Dec 9, 2013 2:15pm Dec 9, 2013 2:15pm
Quoting Proximus
{quote} OMG, people feed their family with a martingale system !!! That's just sad, i`m really sorry for that family.That guy who is feeding its family with martingale is a gambling addict nuts person.
You know, now I find these comments funny!!!
Keep on saying it doesn't work...
Keep on saying they're lucky...
Consistent luck - mmm, that's a good one [yep, consistency is of utmost importance no matter how you get it, nubs] - wouldn't call it luck, though... never mind - keep up with that!
The single most important factor is having control of your own life.
  • #462
  • Dec 9, 2013 7:07pm Dec 9, 2013 7:07pm
Quoting Mikkk01
{quote} You know, now I find these comments funny!!! Keep on saying it doesn't work... Keep on saying they're lucky... Consistent luck - mmm, that's a good one [yep, consistency is of utmost importance no matter how you get it, nubs] - wouldn't call it luck, though... never mind - keep up with that!
Ok i wont waste my time more on this thread, i will unsubscribe, but before that here is my last proof to convince you.A scientific paper which examined the martingale betting system vs the constant betting system, and the constant was better.

If you dont believe in scientific proof, then it's no point wasting more my time on you, because you are too ignorant ,no offence.I hope this will change your mind:

http://groups.inf.ed.ac.uk/vision/MC...s/fulltext.pdf

You can clearly see on page 421, figure 4 what i meant.Good luck!
"There's a sucker born every minute" - P.T. Barnum
  • #463
  • Edited 7:26am Dec 10, 2013 4:56am | Edited 7:26am
Quoting Proximus
{quote} Ok i wont waste my time more on this thread, i will unsubscribe, but before that here is my last proof to convince you.A scientific paper which examined the martingale betting system vs the constant betting system, and the constant was better. If you dont believe in scientific proof, then it's no point wasting more my time on you, because you are too ignorant ,no offence.I hope this will change your mind: http://groups.inf.ed.ac.uk/vision/MC...s/fulltext.pdf You can clearly see on page 421, figure 4 what i meant.Good...
This isn't proving anything, except that martingale will fail eventually - thanx, I know...
Idea is - we'll already get initial capital out and trade on profits in the long run as your tester showed [knew that without it].
The single most important factor is having control of your own life.
  • #464
  • Dec 11, 2013 11:13pm Dec 11, 2013 11:13pm
I have tasted different variations of martin system and antimartin system in my experience, Forex and Martin are not friends

Forget about martin if you want to trade long time

If you want to use forex as casino for adrenalin, Martin is good


Choose for yourself, Good luck
  • #465
  • Dec 22, 2013 11:53am Dec 22, 2013 11:53am
Binary options is all I'm gonna say for martingale
Learn, a forex trader must, unlearn and relearn he will.
  • #466
  • Jan 15, 2014 10:26pm Jan 15, 2014 10:26pm
Quoting COGSx86
Binary options is all I'm gonna say for martingale
Do you trade Binary Options using martingale system? Could you explain the detail?
  • #467
  • Jan 16, 2014 12:41am Jan 16, 2014 12:41am
Incredible, after all the wisdom shared on here people still talk about binary options and martingale ! Enough said !
  • #468
  • Jan 16, 2014 3:12am Jan 16, 2014 3:12am
It's not something I would do!

I've been trading for over 7+ years and this is not how the top traders make money.
  • #469
  • Jan 17, 2014 10:22pm Jan 17, 2014 10:22pm
Quoting ronald_fsm
hello guys , i just want to know is that martingale works? .
no. next question.
  • #470
  • Feb 5, 2014 9:56am Feb 5, 2014 9:56am
Of course it is working. Always working, unless you run out of monies. This is small problem, no.
please read first post, i update for you, okay good guy. i like you.
  • #471
  • Feb 11, 2014 2:03pm Feb 11, 2014 2:03pm
I am near certain every system can either work or fail based almost entirely on the user. Martingale is no different. People here stating that it doesn't work are saying so because it failed them, or they are self-anointed statisticians who simply do not believe it could (as it can't, statistically speaking, so they aren't wrong). On the other hand, those who use the concept in a non exclusive, and non rigid, form will have an opportunity to claim successes. I've been trading for seven years, which is a short period in comparison to many. Nevertheless, I've found that martingale is as appropriate in certain market conditions as any method you could use to assist in your trading.
The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #472
  • Feb 11, 2014 2:48pm Feb 11, 2014 2:48pm
Quoting StockKJay
I am near certain every system can either work or fail based almost entirely on the user. Martingale is no different. People here stating that it doesn't work are saying so because it failed them, or they are self-anointed statisticians who simply do not believe it could (as it can't, statistically speaking, so they aren't wrong). On the other hand, those who use the concept in a non exclusive, and non rigid, form will have an opportunity to claim successes.
But it's not a matter of being a "self-anointed statistician". I would agree with you that "every system can either work or fail based almost entirely on the user" when it comes to trading systems. But martingale is a staking system, not a trading system, and staking systems break down to an exercise in pure math.

With respect, you can't say "2+2=4, but I can make it equal 5 if I use the concept in a non exclusive and non rigid form" and/or if it's applied to a trading context. The math behind probability theory is arguably more complex than 2+2=4, but the principle remains the same.

I have no doubt that some traders have success using different martingale variants. I (and others) have explained the reasons for that in earlier posts; please excuse me for being too lazy to repeat myself, especially as I'm up to my neck with MT4 build 600 problems at the moment.
  • #473
  • Feb 11, 2014 3:10pm Feb 11, 2014 3:10pm
I think both of you StockKJay and hanover are right, this is why I have this question for both of you:

I you had a rather simple automated trading system backed by a martingale staking system back-tested over past 6 years with success would you give it a try on a real account ?
Simplicity is the Ultimate Sophistication.
  • #474
  • Edited 4:04pm Feb 11, 2014 3:43pm | Edited 4:04pm
Quoting broketrader
I think both of you StockKJay and hanover are right, this is why I have this question for both of you: I you had a rather simple automated trading system backed by a martingale staking system back-tested over past 6 years with success would you give it a try on a real account ?
BT,

If it's a 'full' martingale, i.e.
1. doubles the stake with every loss;
2. is uncapped, i.e. unlimited doubles = potentially unlimited loss;
3. seeks to recover recent losses, rather than increase position size because market probabilities have improved (e.g. the further price moves away from a mean, the higher the probability that it will return);
4. I'm investing serious money — as opposed to playing with a $100 account
.......then I would definitely NOT try it on a real account, no matter how lengthy or exhaustive the backtesting (see my point #5 here)

If however,
1. it is a less severe progression than doubling;
2. is capped, i.e. pulls the plug a long time before the stake increases cause a margin call;
3. increases the stake based on provable market probabilities, as opposed to merely recovering recent losses;
4. I was investing money that I could easily shrug off if I lost it, e.g. see how far I could grow a $100 account, and withdrawing funds occasionally to reduce the risk of total loss
.......then I might be persuaded to give it a try

Also, I place MUCH more faith in manual, than automated, systems. Proficient human traders will always make more intelligent trading decisions than EAs. EAs can't factor in context, analyze visual patterns, adapt to changing market conditions, etc etc.

For me, the key questions are always:
a) does the trading system make profit without the martingale? If the answer is no, then point 3 above becomes a 'life or death' issue. If the system is unprofitable without the MM, and the MM is merely seeking to recover losses, then the system has no edge.
b) what is the worst case drawdown that I'm willing to accept, and how likely is this to be threatened? If I can't answer the latter, and I would be investing serious money, then it's an obvious non-starter.

As the textbooks tell us, the three most important aspects of trading are risk management, risk management and risk management.

Bottom line is that it's your money, your choice. Good luck.

My 2c,
David
  • #475
  • Feb 11, 2014 4:11pm Feb 11, 2014 4:11pm
Quoting hanover
{quote} But it's not a matter of being a "self-anointed statistician". I would agree with you that "every system can either work or fail based almost entirely on the user" when it comes to trading systems. But martingale is a staking system, not a trading system, and staking systems break down to an exercise in pure math. With respect, you can't say "2+2=4, but I can make it equal 5 if I use the concept in a non exclusive and non rigid form" and/or if it's applied to a trading context. The math behind probability theory is arguably more complex...
Hanover, you've always been one of my favorite posters. I showed up for the first time in a year, probably more, and I have the privilege of your response. I don't use the "self-anointed" point as a jab. However, many who never even look at the data or work the model will say it doesn't work due to the previously completed statistical data.

Martingale will not work if you use it by strict definition. I'd venture to say there is published scientific truth to that statement. However, the concept behind Martingale, which is increasing your bet after a loss, and that is all I'm borrowing, and also what I mean by not following it rigidly, can most definitely be a positive trading strategy when the market is approaching positive odds (ie. greater than 50/50). In the end, people have to use discretion and time things correctly at least some of the time. There is no "Holy Grail" system in the sense it can be automated. Never has been. Never will be.

I'd never say you were lazy. Glad to see one of the great minds still about.
The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #476
  • Feb 11, 2014 4:15pm Feb 11, 2014 4:15pm
I can say that :

1) Yes, is a less severe progression than doubling. Doubling martingales are impossible to implement!
2) No, it's not capped but the non doubling nature and starting small can provide enough room. Anyway, if you pull the plug, why play a martingale ?
3) I call market direction what you call market probabilities, so stake is increased when direction changes.
4) Yes, I invest money I can afford to lose but off course $100 will be far from enough.

Your faith proves that you are a better trader than me, personally I think I'm better at programming than trading.

Yes, the textbooks have it right, risk management is the key => Gave enough room for the worst draw-down and a bit more knowing that that's not a guarantee that a bigger one will not come.

Thank you for have taken the time to respond
Simplicity is the Ultimate Sophistication.
  • #477
  • Feb 11, 2014 5:26pm Feb 11, 2014 5:26pm
I use a variant of Martingale although I NEVER double down. However in certain situations I average down/scale in especially if I am hedging with a highly correlated pair going in the other direction. Would not recommend this without a large account as you need to handle large drawdowns at times. But if you have a fairly high risk tolerance and sound money management it's a decent strategy to have in your toolbox
  • #478
  • Feb 11, 2014 5:34pm Feb 11, 2014 5:34pm
Long term nothing will work.

Just check the mathematical studies made about these systems, with millions of tests, in the long term, they always lose.

Short term you can even win in roulette with Martingale. You will win, until you lose it all. Same as with forex. You can have 1 great month, 2 good months, 3 decent months... But long term, you will always lose. That's why you cannot make a decent living long term in Forex.

You can enter FOREX, play a few months, and maybe do some money. Then quit. Same as Casino or Roulette. If you stay long term, you will lose it all.

Just my 3 cents.
The Black Swan: The Impact of the Highly Improbable
  • #479
  • Feb 11, 2014 5:47pm Feb 11, 2014 5:47pm
Quoting StockKJay
However, the concept behind Martingale, which is increasing your bet after a loss, and that is all I'm borrowing, and also what I mean by not following it rigidly, can most definitely be a positive trading strategy when the market is approaching positive odds (ie. greater than 50/50).
Just for fun, another way of looking at trading math:

#1. Total overall P/L = sum of P/L across all trades.

#2. P/L of each trade = position size (lots) x the number of pips won/lost.

#3. Number of pips won/lost is solely the product of entries and exits (price at exit minus price at entry).

#4. To improve overall P/L, then, we must either:
(a) improve the accuracy of our entries and exits [or, viewed another way, improve either the average trade RR (ratio of pips won, to pips lost); or the win rate; but with the improvement in one exceeding any decrease in the other];
AND / OR
(b) have the larger position sizes coincide, on average, with the better performing (i.e. higher probability) trades. IMO this is the only way that MM can provide, or enhance an existing, 'edge'.

#5. From a risk management angle, we must balance #4(b), and overall sizing, with the need to keep overall drawdown within a personally acceptable level.

Points #4 and #5 become the crux of any trading system. As with any MM, we would need martingale to play itself out in such a way as to have the bigger sizes coincide with the highest probability setups, to provide any kind of edge. Exactly as you say, "when the market is approaching positive odds (ie. greater than 50/50)".
  • #480
  • Feb 11, 2014 9:21pm Feb 11, 2014 9:21pm
Quoting MapleLeaf
Long term nothing will work. Just check the mathematical studies made about these systems, with millions of tests, in the long term, they always lose. Short term you can even win in roulette with Martingale. You will win, until you lose it all. Same as with forex. You can have 1 great month, 2 good months, 3 decent months... But long term, you will always lose. That's why you cannot make a decent living long term in Forex. You can enter FOREX, play a few months, and maybe do some money. Then quit. Same as Casino or Roulette. If you stay long term,...


I see where you are coming from, around mathematical studies on "these system" but why then are there millionaires and billionaires, did they use martingale ?
Or said differently, statistically speaking isnt it far to say the percentile curve for traders who are located in the upper 95 percentile can have the ability to form a martingale approach ?

What about traders who have found ways to gauge sentiment + technical analysis instead of some code that is unable to gauge the fluctuations and rate of change of the market, news events, or even just the psychological aspect that traders have ?

What makes a pro card player a pro card player or a pro trader a pro trader?

Why is it they would not be able to use martingale to find success ?

What about individuals who have been in the market developing a trading idea/understanding of the market plus years of experience to use this technique ?

It can be done, with a gauge of caution of course specifically in the Binary Options business
Learn, a forex trader must, unlearn and relearn he will.
2 traders viewing now