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Does the martingale system really work?

  • #501
  • Apr 9, 2014 12:36pm Apr 9, 2014 12:36pm
stupid ass just has crazy faith w/o proof and what can you do about it?

here are 2 straight facts that winner understand and loser refuse to accept

1. if you have an edge, using martingale only make you easier to wipe-out

2. if you don't have an edge, using martingale you still end up losing

especially for 1st point, if you have an edge, why the fuck do you use martingale?

Quoting Qualm01
{quote} I won t prove you anything but i help you to understand genuis(i hope you can understand)..i ask you two questions and i want you to answer them so we can go one step forward... What is trader' job? What is risk management in trading? By the way have u got an acount that name is Pip at another forex forum?
  • #502
  • Apr 9, 2014 12:58pm Apr 9, 2014 12:58pm
If you lose too many times in a row then you're screwed. But what if you use all of your skills + martingale?

I'm new in the forex business (using a lot of Demo accounts etc). Many of you guys here are very good at trading. For example:

If you trade very carefully/accurately, what is the risk that you lose let's say six times in a row? Has that happend to any of you "proes" out there?

Greetings
  • #503
  • Apr 9, 2014 1:28pm Apr 9, 2014 1:28pm
Quoting charvo
ultimately, for longterm trading professionals, or who takes trading seriously, martingale is not useful. it is only expanding the risk to wipe-out, while almost impossible to help likelihood to win.
Exactly. What martingale excels at is maximizing risk and risk is precisely what a trader aims to minimize.
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #504
  • Apr 9, 2014 5:07pm Apr 9, 2014 5:07pm
you idiot just make me laughing, thanks.

no not personal at all. i don't really hate you. why would i? just your concepts are totally messed up and you are misleading newbies.

but hey, on second thought, go ahead misleading them. without tasting crap first, they wouldn't know what's real food ---- after all, that's how i walked my path.......

oh, btw, the chart you uploaded above is correct. but it has nothing to do with RR, geez, you even don't understand that? when you read that chart, don't think anything of RR, if you still confused........

Quoting Qualm01
Ultrarookie here is what you are looking for... I am not sure but risk:reward should be 1:1 and should be same for all winning rates here..This is an old sheet and i really forget where i download.. To Charvo:watch your mouth f*ckt*rd...or i ll f*ck ur tiny chinese *ss very bad like my grand grandfathers And this time you won t rewrite art of war like sun-tzu but write kamasutra {image}
  • #505
  • Edited 2:59pm Apr 11, 2014 2:44pm | Edited 2:59pm
Watching this conversation for a bit with out much support for martingale, I understand the risk that some portray this theory as but when it comes to binary options you see the. 60 second trades they uses for martingale or even forex trading. I don't agree with this approach.

From everything I say further I will refer to 30 minute charts or above. Martingale can work if the right strategy can be determined to give no greater then 5 candles in a row. Do I trade like this. ? Heck no however finding a EA that has the ability to open and close your position on the open and close of the candle stick I think you would be able to find a setup that will be able to perdict within 5 candles which way the market will go. In fact finding a setup that will produce within signals more then 56% of the time in a 5 series sequence will surely work.

Have I found that setup ? No, I personally use volume zone osicalltor, average sentiment oscilator and hull moving average, for myself to determine the upper trend as well, the proper time to trade, 8am -12pm est. this time give huge tick volume and volaity along with solid price movement.

With all all this said, using support and resistance i s the key to this strategy.

Now the main idea of my future develope would like to revolve around finding/ developing an EA that is able to act on close/ open of candle sticks, and be based around trying to find a setup that is able to eliminate the losing streak of 4 plus candles in a row.

also if you notice on the chart I attached you will notice that not once single time does the setup move for more 3 candles in one direction, from the signals provided by my indicator, to further add, during the times I listed above the indicator is that much more accurate
Attached Image (click to enlarge)
Click to Enlarge Name: image.jpg Size: 742 KB
Learn, a forex trader must, unlearn and relearn he will.
  • #506
  • Apr 11, 2014 5:54pm Apr 11, 2014 5:54pm
whatever you said, WRONG

why? becoz I've tried it

btw, don't think that none has tried your invention years ago

there's nothing new under this sun --------- who said it???

Quoting COGSx86
..........Now the main idea of my future develope would like to revolve around finding/ developing an EA that is able to act on close/ open of candle sticks, and be based around trying to find a setup that is able to eliminate the losing streak of 4 plus candles in a row. also if you notice on the chart I attached you will notice that not once single time does the setup move for more 3 candles in one direction, from the signals provided by my indicator, to further add, during the times I listed above the indicator is that much more accurate {image}...
  • #507
  • Apr 11, 2014 8:02pm Apr 11, 2014 8:02pm
Quoting charvo
whatever you said, WRONG why? becoz I've tried it btw, don't think that none has tried your invention years ago there's nothing new under this sun --------- who said it??? {quote}

I hope you understand that im looking for something that revolves around Binary Options

thats the problem with EA's is that they arent able to give you coding that is able to determine a winning streak or determine the most amount of losing trades using a martingale system or am I missing something ?

As well determine news events, and times of day when not to trade, off hours when there is low tick volume between 2am and 2pm EST for example
All i know is EAs are able to give

Profit
Total Trades
Profit factor
Expected Paypff
drawdown
drawdown %
or exclude what I listed above ?

Also they arent able to give you the running total of trades with winning or losing streks or determine how many candlesticks you would see before winning candle is formed due to the fact EA's revolve around FOREX hold your position based on Pips movement stop lose and trailing stop, where as with Binary Options your only looking for the next 30 minutes does it close up or down.

The coding for something like this would cost a lot of money and take a long time to develop it.

But anyways here is my chart from todoay on the EURUSD, the vertical lines represent my trading time for my system to work, you will notice that when the signal is given you do not see anything more they 3 candles in a row,
I was trading 30 min expiries with Binary Options today!!! From 9am - 1pm EST

I have been working with this setup for 8 months now and each day it is getting better
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd-m30-forextime-ltd-2.png Size: 186 KB
Learn, a forex trader must, unlearn and relearn he will.
  • #508
  • Edited 3:56pm Apr 12, 2014 6:26am | Edited 3:56pm
From a TA-based standpoint, price movement is, for the greater part, almost completely 'random'. That means that if you keep trading for long enough, you'll eventually encounter every conceivable price pattern. Hence with uncapped martingale, you'll eventually encounter the pattern, or sequence of patterns, that causes ruin.

Since uncapped martingale guarantees profit until ruin occurs, the key is to quit while you're ahead. The problem is that you never know when ruin will occur: it might not happen for 2 years, or even 10 years; or it might happen tomorrow. So you never know when the optimal time to quit is, i.e. how far you can push your luck.

It doesn't matter whether you trade spot forex, forex futures, binary options, whatever. For any given instrument, price movement is the same no matter which trading vehicle you use. And in so much as there is a price pattern that can potentially cause a losing trade in your chosen vehicle, everything I've described continues to apply.
  • #509
  • Apr 12, 2014 10:22am Apr 12, 2014 10:22am
I would also like to add, I know a gentlemen that use martingale who is trading in the 80-90% range. If you are curious send me a PM and I will put you in contact, with him. ***** not all trades does he use martingale
Learn, a forex trader must, unlearn and relearn he will.
  • #510
  • Apr 12, 2014 10:27am Apr 12, 2014 10:27am
Quoting hanover
From a TA-based standpoint, price movement is almost completely 'random'. That means that if you keep trading for long enough, you'll eventually encounter every conceivable price pattern. Hence with uncapped martingale, you'll eventually encounter the pattern, or sequence of patterns, that causes ruin. Since uncapped martingale guarantees profit until ruin occurs, the key is to quit while you're ahead. The problem is that you never know when ruin will occur: it might not happen for 2 years, or even 10 years; or it might happen tomorrow. So you never...

Would you you be able to explain HfT algorithms then ? Isn't that the whole idea, of HFT to determine price patterns, price probability, volatility, volume, news events, time of day, price action, momentum, etc ?

another piece to add, is having a setup for example that is able to look back at the 5 previous signals that your coding gives you and determines winning trade set ups comparing volume and price action. This right here is a huge game changer and does work

it can be done!!!!! But not with MT4 technology that is 10 years old, we are in the 21st century and EA variety needs to be changed to meet demand and allow for the complex nature of today's market, with all that I listed above.
Learn, a forex trader must, unlearn and relearn he will.
  • #511
  • Edited 11:42pm Apr 12, 2014 4:30pm | Edited 11:42pm
Quoting COGSx86
I would also like to add, I know a gentlemen that use martingale who is trading in the 80-90% range.
Sure, it’s true that, everything else being equal, the higher the win rate, the greater the probability of surviving for longer, while using uncapped martingale. But that doesn’t alter the fact that martingale increases the risk of ruin exponentially (compared to flat betting the original stake), no matter what the win rate is. If you have a positive expectancy system, you will win anyway, without martingale, as the wins will outnumber the losses over time. Since, with any system, martingale (1) does not improve expectancy (see PipMeUp's mathematical proof here), and (2) increases risk of ruin exponentially, that makes it a lose-lose proposition. Why use it?

Here is an example (historical test) of a typical martingale, that trades a candle-based price pattern. It survived 1931 trades, and had a win rate of 94%, before ruin finally occurred.

Quoting COGSx86
{quote} Would you you be able to explain HfT algorithms then ? Isn't that the whole idea, of HFT to determine price patterns, price probability, volatility, volume, news events, time of day, price action, momentum, etc ?
I don’t understand the relevance of HFT to this discussion. I’m not arguing that profitable price patterns don’t exist, or that it's impossible to exploit these to trade profitably. My point is that with a win rate of anything less than 100%, it is necessary to consider risk; and MM systems that leave the trader open to potentially unlimited loss are the antithesis of prudent risk management.
  • #512
  • Apr 12, 2014 8:01pm Apr 12, 2014 8:01pm
no it doesn't.
  • #513
  • Apr 12, 2014 9:05pm Apr 12, 2014 9:05pm
Quoting COGSx86
{quote} I hope you understand that im looking for something that revolves around Binary Options thats the problem with EA's is that they arent able to give you coding that is able to determine a winning streak or determine the most amount of losing trades using a martingale system or am I missing something ? As well determine news events, and times of day when not to trade, off hours when there is low tick volume between 2am and 2pm EST for example All i know is EAs are able to give Profit Total Trades Profit factor Expected Paypff drawdown drawdown...
It's been awhile since I've read something that smells so bad.

It's time you go brush your teeth.
Congratulations ScalaFX for coming out of the closet!
  • #514
  • Apr 12, 2014 11:12pm Apr 12, 2014 11:12pm
Quoting nubcake
{quote} It's been awhile since I've read something that smells so bad. It's time you go brush your teeth.

So your telling me you don't a system to predict the next candle or in the case of binary options predict within the next 4-5 candles for 30 min chart is possible ? Or daily ?
Learn, a forex trader must, unlearn and relearn he will.
  • #515
  • Apr 13, 2014 12:19am Apr 13, 2014 12:19am
Quoting COGSx86
{quote} So your telling me you don't a system to predict the next candle or in the case of binary options predict within the next 4-5 candles for 30 min chart is possible ? Or daily ?
I'm telling you that you sound like a complete idiot and are speaking a lot of bullshit that look like sentences but which fail to meet the criteria of "things that make sense to sane semi-educated people". It seems to me that you are just making shit up in the hopes that someone, somewhere, will nod their head and go "hey you are so right!", and thus validate your fucked-up notions on a broad range of topics. I'm sure if you keep at it long enough someone will finally give you that validation. Until then you will just have to rest your head at night knowing that there are people out there who recognize you for what you are. A muppet.

Nonetheless, this is the perfect thread for the likes of you.
Congratulations ScalaFX for coming out of the closet!
  • #516
  • Apr 13, 2014 1:44am Apr 13, 2014 1:44am
Martingale systems are nothing more than a range based system. Once you go outside the range of the Martingale you are done. For example lets say you reenter your martingale at 100 pips. Every time you double down you use x amount of dollars from the account. At 7 levels you no longer have enough account left to double down again. So at 800 pips your account is done. As long as you stay inside the range of your account and the Martingale you can succeed. So you say OK I will reenter at 200 and my range than becomes 1600 pips. Sounds good for some currency ranges. The problem is now your ability to retreat to the profit line. For example if you reenter and price moves up 195 pips or 5 short of your next reenter point. You have the 195 plus the 200 pip range to recover. that is a 395 pip move to recover. That is a big gap and if your re-tracement only does 300 and then pushes on back into its long term trend you are wiped out.

So no matter how you play your martingale: small range so you catch the retracement easily, it can be overcome by a sudden big move that overcomes your range OR big range your retracement can be spread so far apart it never reaches its safety retracement point and the long term trend will wipe you out. So as Hanover says at some point your Martingale is guaranteed to have a market move that will beat your martingale system.

The only way then to overcome the death trade that will always happen at some point in a Martingale system is to close it out early if you can recognize it early enough to do so.
  • #517
  • Apr 13, 2014 2:03am Apr 13, 2014 2:03am
Yes, definitely work best 100% sure about that... are you satisfy now ? next question please.. !!
  • #518
  • Apr 13, 2014 3:11am Apr 13, 2014 3:11am
Quoting charvo
for longterm trading professionals, or who takes trading seriously, martingale is not useful. it is only expanding the risk to wipe-out, {quote}
Not for all longterm trading professionals..

I help design simple rule for my friend that work as fund manager for one of the biggest pension fund in my country.
he work with 30 Mil $ capital, the main purpose is not for trade just like intraday trader do, but for investment and save their capital asset. they deal with one of biggest australian bank, without leverage of course.

the rule is simple
1. never open short position, just open long position.
2. only open first long position bellow instruments parity.
3. only open long position in any instrument with positive swap for long position.
4. the range is 1000 point per position.
5. use 2 multiplier martingale.

So according to the above rule, from the beginning you will know that your maximum risk range is 10000 point for your first position (calculating from 0) for example look at AUDJPY, closing price is 95.440 or under parity at 100.000 or 9544 point to 0.

My friend pension fund long position in AUDJPY starting from 70.000, then 80.000 and 90.000 and they still waiting for AUDJPY goes to 100.000 to close their long position at 90.000. so they will only do the double down, if price goes to 80.000, and never open long position at 100.000 (this parity price and above only for exit). they hold all their long positions in AUDJPY since 2009, and only close the nearest position from parity in this current situation the long position at 90.000.

So, don't you think that martingale can work if you use it in right way, and of course not for you or for me who still under capitalized.

MTH
  • #519
  • Edited 5:17pm Apr 13, 2014 7:25am | Edited 5:17pm
Quoting nanningbob
Martingale systems are nothing more than a range based system. Once you go outside the range of the Martingale you are done. For example lets say you reenter your martingale at 100 pips. Every time you double down you use x amount of dollars from the account. At 7 levels you no longer have enough account left to double down again. So at 800 pips your account is done. As long as you stay inside the range of your account and the Martingale you can succeed. So you say OK I will reenter at 200 and my range than becomes 1600 pips. Sounds good for some...
I like that term: "The Death Trade": Whatever system you use, identifying and removing the trades that rob you of profits is crucial to your system. People fall in love with a certain trading pattern of behavior, and use it again and again, leading to their certain demise.

In the martingale, this can happen more quickly than in many another system. (That is why I avoid it.) As long as you are ready, willing, and able to buy your way away from margin call, this may work for you big time. Going Long Aussie and with the swap, and avoiding going too big is a decent idea. Pretty much one that I am using. Why the aussie? Because they have stuff in the ground that the world needs if people are to make a good life for themselves, good infrastructure, and a skilled banking community that proved itself during the worst panic to hit the forex. If you view it as a company, it has good resources, good market value, and an able management, and at present is still undervalued.

Here is a "nice" tactic:
On wednesdays, wait till 20 minutes or so before your rollover time: (My rollover time is 5:00 pm est) if the Aussie pair of your choice ( why not do them all?) is climbing on the high side of the 8bar moving average, Buy big. At 5:00 pm trading is suspended for a minute or so while the broker assigns to your account some money, called "the swap", or "the carry". Once you see the addition to your account, and it is in profit, you can close, and go back to your normal size.
Why wednesdays? The swap triples on wednesdays to make up for not having a swap over the weekend. Why did they choose wednesday to do this? Why indeed...
Oh yes, remember this rule: "Never ever open a trade on the wrong side of the 8 bar moving average!"

That pretty well puts the kiboshon Mr nightingale.
  • #520
  • Apr 13, 2014 4:37pm Apr 13, 2014 4:37pm
i'm well aware the existence of you kind of traders.

the fund you mentioned is:

1. not aiming at consistent profit to growth
2. not consider "time" as capital while in fact, time is the most precious capital for everyone and all businesses (i guess)

the 1000 pips or 10000 pips grid idea is also frequently seen in retail traders, but i don't think they do that to make a living, lol, lmfao

as the goal is different, so there's no common values shared by me and your fund. and good luck.

Quoting Kiads
{quote} Not for all longterm trading professionals.. So, don't you think that martingale can work if you use it in right way, and of course not for you or for me who still under capitalized. MTH
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