Magix, Martingales, and Market Myths

[chiquiMB1984]

Throughout my years in forum, I have been a member of threads, opened a number of my own and been a part of conversations on many topics, from the trading, via the trade systems and a lot of stops in between.

There is always a seemingly commonality to all of these and that is the misunderstanding of the most basic market concepts that reaches past semantics and a gap of mother tongue.

These can split into heated debates and end run, there's still a gaping hole where data could be, but emptiness and ignorance always seem to prevail.

Even with the most educated passes and excerpts taken from other trading sources, statistical information that is brought in from around...there's still a lot of confusion. I get it...there's a lot of advice available and for the Average FF member, relatively new to market and trading, new to particular ideas and ideals, after blindly in the hopes of grabbing a tiny share of the own.

Context!

Just because a term or statement relates to market, does not allow it to be relevant in most conversations and worse yet, the data posted might not only be inaccurate, but completely worthless rhetoric that's been grapevined throughout the pages here and in other forums.

All the world's problems as is trade related will not end here...but I really do hope to clear up some of the confusion and ignorance that runs rampant.

Let's start off with the foundation idea of Martingales.

Martingale is unquestionably a taboo around here and in a lot of other trade forums, but why?

What makes these such a terrible thing?

Why do so many men and women weigh in so heavily on this one seemingly simple idea?

I'll be the first to tell ya, that most individuals do not know JACK. Sure, they have read something somewhere, or have completed the mathematics, their mathematics, or conducted one once, or knew a man or are just chiming in to agree with a buddy...but that really is the extent of the data you will see readily available.

The assumptions made are pure speculation brought about by the same spread of grapevine ignorance. 1 man says something, somebody else adds a piece to it, by the time it strikes your eyes and eyes, and is of no more value by appliion to trading than the banana bread recipe of my grandmother.

What is most amusing is people who show up and spout that they would never use a martingale system...and if you look at their trade explorer you would see how many places they have in a single tool...the historical transactions taken and the way they actually pile up...however Nooooooooooooooo, they'd never be so stupid as to use a MARTINGALE!!

It's actually ridiculous.

Other perspectives range from a single trade shot, held for , and cashed in just preceding square with swaps to constant stop reduction losers with an equity curve that is a 45 degree angle from top left to bottom right of their trade explorer, (these are the individuals who mandate prevent loss and take profits but cannot seem to grasp the general idea of if ).

Nonot all traders that have an opinion of Martingale Systems are Market Losers...but because somebody is profitable in a single methodology, does not necessarily make them an authority on the other related topics. . .even if they could back up their statements with statistics and quotes and big words that sound and look really important...

Ya wanna know why?

Because there are an infinite number of approaches to apply a Martingale concept for your particular trading and also the information being passed might not be relevant.

Is the fuel economy of a 1998 Plymouth Voyager exactly the like a 2004 GM Safari?

Yeah...I do not know either.

It takes a grand number of willing ignorance to revolve all things to being the same...particularly in the event that you've shown up at a quest for advice...and the only information you'll be able to find, is based on a single idea.

[Ann]

I've coded my EA, that has a egy, to take form trades, lets see how long it lasts before it warms up.

http://www.myfxbook.com/members/thesoftware/multitrader-with-mgish/1007561

[nemesansac]

Hi!

Lately I saw a reference of the alarming number of busted demo accounts I have on my MyFXBook (see post here: https://www.nigeriaforextrading.com/trading-discussion/74-thoughts-book.html)... plus I really enjoy having that many busted ones!

Why? Allow me to put an example... How can automobile builders know the capacity of an automobile to withstand an impact? They create their calculations (backtesting) and then the actually crash them (forward testing on demonstration )...

The kind of grids I commerce are a combination between a basket commerce plus a pseudo-martingale trade (grid trading). So a Number of the problems and risks the account will be confronting can NOT be backtested due to:Actual spread in the broker at the time the simulation is analyzing Isn't known Nearly all of my entrance exit signals trade under the 1 hour timeframe... so they became broker feeder dependent I trade a multi-symbol egy and crappy MT4 backtester Can't simulate them And many times it is a multi-egy, multi-symbol egy... even more complied to simulate So backtesting is useful to assess if the triggers are performing properly and also to have a general idea whether the egy may be profitable.


So I want to utilize many forward analyzing account to measure the performance and extremes of the egy to understand where place the limits on the real ones. Therefore a demo busted account is a forewarned issue on a real one....

When trading numerous symbols you've got the advantage than DD will equilibrate but when symbols are too connected they just give you another consequences... so forward testing is the only way to go.

Just how many demo accounts I could be running at the same moment? At this moment, between 20 to 40, in addition to the ones fellow transactions too kindly talk to me...

Just how many real accounts I trading on real now? At this moment, none. Yup! None! I am still on my summer break from trading.

How do I trade a real grid account? Allow me to check. . .Predefined account, EA, position, grid and order risks based on what the forwards testings of the egy gave me... Manual intervention is something smells awful... Predefined target profit of the whole account where everything is closed down in order to rinse and repeat... No compounding in order level... compounding is calculated in account level every time after the account is reset and taking into account my Entire trading equity (not the amount used to finance the account) So reading this you can say as a nobby... Hey! That sounds a lot of work to conduct a marty......


EA grid trading needs a lot of work and efforts... if you want to be profitable.

Cheers,
Sergien

[Ann]

EA grid trading requires a lot of efforts and work... if you would like to be profitable. Lt;== I think any sort of trading is very difficult and I believe people are trying to trade in the bullshit they've read or seeking to trade techniques the so called gurus are teaching individuals, apparently 95 percent of individuals lose, trading forex, I'd say the number is higher.

Biggest mistake at potential trader can do is trade low timeframes and trade against the trend, low timeframes are just noise.

[mmkokluz]

low timeframes are only noise. Asw What can you mean by that, perhaps I have missed something.
Are these applicable:

NOISE
3. Physics A disturbance a disturbance, that obscures or reduces the clarity of asignal.
4. Computer Science Irrelevant or meaningless data.

I really don't get your logic, how can you tell me on what period you believe that the'sound' stops?

[leku7GAMEM]

Well I have been not able to get any constructive exchange of thoughts from the Martingaling - Looks good until the inescapable thread. Only the typical individuals repeating the wisdom of the death trade. So some exchanging and discussing of ideas here.

[Ann]

quote What do you mean by that, maybe I've missed something. Are either of these applicable: NOISE 3. Physics A disturbance a disturbance, that reduces or obscures the clarity of asignal. 4. Computer Science Irrelevant or meaningless data. I don't get your logic, can you tell me on what timeframe you think the'sound' stops? A fad for me is a confluence of 3 time frames agreeing, H4, D1 and W1, Dow theory.

I do trade into the D1 or W1 timeframes, lower timeframes range before going into D1 and W1.

[mmkokluz]

quote A trend for me is a confluence of 3 time frames agreeing, H4, D1 and W1, Dow concept. I do trade into the D1 or even W1 timeframes timeframes range before going into D1 and W1. Asw ok...

[Jomgepopk]

Dead thread that needs more views. Martingale is frowned upon for the most stupid reasons. I've tried lot of variations and eventually have a style the works well for me.

I begin with $5000 and twice my lot dimensions whenever I win and half of it when I lose to create martingale a little less risky. I could be wrong although I've heard this is known as reverse martingale.

Martingale needs more conversation. There are many variations for trading philosophies that are different that anybody who attacks it comes does come across as naive.

For the risk averse audience you can micro lots and what not.


I have traded a total of $5000 deposits rather than blew my account. Three times it took me more than 20 transactions to reach my goal i.e. martingale 5 times assuming that every trade will be successful. These three times were my failures and so my collapse isn't loss but time spent.


I can't exchange any way and whenever I see someone on a thread bashing someone who claims he can go from rags to riches pisses me off to no end.


Measure 1. Produce a successful system with more than 70% winning ratio previously (past does not equal current but this is you best bet)

Measure 2. Find a way to make stop loss small and take profit big to achieve a risk to benefit of more than 1:3.
My current risk to benefit is 1:4 for a single lot and an exit egy for other. 3 from 5 times in a week I am in a position to accomplish this ratio on that lot and one from 5 times every week I am in a position to achieve a 1:10 on the depart egy kind lot.

Measure 3. Apply martingale sensibly

Measure 4. Never exchange beyond that although reach your goal. You could try and keep doubling your cash but I personally want to begin again to reduce my risk further.

The aims is to earn atleast $30,000 a month but the fact is I end up with 18-22. I have not managed to split the 30,000 without breaking the 5 transactions rule.

The first trade is very important. In the event you lose in that trade you want to half your investment amount next time. If you lose you so and half on. Never have I wiped out an account after completely fine tuning my egy. Before I use to not take it badly and ended up dropping loads but after taking it professionally I've have turned around my trading experience and come to the conclusion that the only way to actually get rich on forex is aggressive compounding.

[Kemmi]

Dead ribbon which requires more viewpoints. Martingale is frowned upon for the most idiotic reasons. I have tried lot of variants and eventually have a style that the functions nicely. I start with $5000 and double my lot size whenever I win and half it when I lose to make martingale a little less risky. That I could be wrong although I have discovered that this is known as reverse martingale. Martingale requires discussion. There are many variants for trading philosophies that anyone who attacks it comes does come across as naive. For the risk averse audience you... Many thanks for sharing your egy. I like your strategy. Am I right to assume, that your trades are taken by you independently? So that you don't add to a losing trade and trade instead on pairs whereever a signal is provided by your egy? What is your starting lot size for a 5000 dollar account?

[Jomgepopk]

quote Many thanks for sharing your own egy. I like your approach. Am I correct to assume, that you take your transactions independently from one another? So that you do not add to a losing trade and trade instead on pairs whereever a signal is given by your egy? What is your starting lot size to get a 5000 dollar account?
Independent.

1% of 5000 because we can't predict if we'll win the very first transaction. After 1:2 both lots are set to breakeven.

Meaning I am willing to lose $50 in my very first trade.

Average stoploss for me personally is 15pips so $150 are invested. My most recent $5000 had one new rule. No two lots. I didn't like watching the market to get long. Now it risk to benefit and I like it this way. It is much safer than before. So today it is 1 lot that is set to breakeven(including spread coz I am a miser).

Also I have increased my TP to 5 times the reduction including disperse (average of past 6 months for the traded currency pair). It has made my martingale a bit slow and so only 5 total trades are taken and then money is withdrawn.

Hypothetical if all transactions are profit transactions (obviously this does not happen but it's very important for me to decide on a goal and keep trading martingale until it is achieved.)

1. $3 per pip

Target at 75 pips

75*3


2. $6 per pip

etc....


I use different brokers every time I start doing this because I understand in true ECN this is not feasible so I simply want them to think I was lucky.