Does the MartinGale strategy work?

Beginner Questions
1

Let me explain my thoughts for this strategy
My initial risk will be 0.1% of the fixed capital.
If touch wood, I lose 10 trades conscutively, the wipeouts are just about 1% of the account, which I will be emotionally uneffected.

I only take one trade per day for a pair, which is EURUSD.
My Risk reward will be 1 to 2, I’m risking only 10pips per day.
I’m buying and selling alternatively regardless of winners or losses.
For example, I buy at trade 1, then I will sell at trade 2 and buy at trade 3…

My goal is to make an average of 1% per month, 12% per year.

What do you guys think?
Please give constructive opinions, thanks.
What I meant is that give your stand point + reasonable explanation.

2

When people say that, in practice it usually means they only want to hear from people who agree with them. That’s usually what happens, too, which is why they rarely learn anything.

This thread is what might actually help you, but only if you read it, think about it, discuss it with traders who are making a living, and ask yourself whether it’s either possible or sensible to try to create artificially, simply by position-size adjustment, an edge for a method that doesn’t actually have one on its own, without doing that.

When you ask the right questions, the answers become much easier.

3

Thanks for replying. I don’t mean by only want to hear from people who agree with me. Contructive means not disagreeng or argreeng without reasonable explanation.

4

how do you want to open and close transactions? Randomly?

5

Very easy to back test. See how many losses in a row you get.

7

Randomly, but alternatively.
I’m opening a buy trade today, the following trade must be a sell trade

8

I guess 10 losses in a row would be completely rare. But, even it happens, my total lost is about 1% of my portfolio.

9

I backtested a horse racing strategy based on a book called “how to find a black cat in a coal cellar”. I was testing with long odds winners. During the backtesting, 10 losses in a row was very common and the most was 23 losses in a row. that should be sufficient reason to stop looking at whether martingale strategies can win.

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10

What do your backtests say?

11

Trading a 1:2 will lose 66% of the time.
Losing 10 trades in a row with 66% expectancy is not uncommon. Running EurUsd through the last few years with 10 pip SL & 20 pip TP commonly had losing streaks of 11, 12 & 13 max.

12

Do you mean buying and selling alternatively?
If a stong trending market occur, 10 losses will be common, but buying and selling in alternate.

Most videos i found on Youtube explaining Martingale only uses the same direction, and it definitely will fail especially in a super strong trend.

Plus, I’m only entering one trade at the formation of D1 candlestick.

13

All buying, all selling, alternative buying and selling, swapping every two losses, swapping sides every win, all same odds. (see Dice on Stake)

D1 M1 Y1 candlestick all same odds.

14

Consecutive losses are not uncommon, that’s why my starting bet is 0.1%. After 14 consecutive losses my drawdown will be about 15%

Anyway, I’m going to back-test before i start trading. Do you mind sharing what strategy you are using?

15

If you want to earn just 12% a year. Why do trading, waste your time and peace. Simply put your funds in S & P 500, NASDAQ, VTT, Nifty 50, Sensex, etc Index funds. They can generate between 12% to 18% a year with lowest risk possible. Additionally, it does not requires your time, thinking, technical or fundamental analysis.

Trading = Building Capital (It better for peoples who want to build there capital as Profession and here peoples do not look for 12% a year)

Investment = Growing Capital you built from your professional (In this category, peoples play safe they usually invest in Index funds or try to beat Index funds by taking little more risk and spending some of there time.)

If your looking for 12%, Than your in wrong place. Trading is peoples looking for profession not Investment.

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16

That’s true: I would be absolutely astonished if even 1% of this forum’s members were making as much as 12% per year from their trading.

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17

Have you heard of the phrase something along the lines of 98% of the traders lose money?

Secondly, I have a full time job, not able to stare at charts. I also don’t think I enjoy staring at charts.

Thiry SNP 500 are subjected to market condition, and it has to be invested for a longer period of time. Having 12% is just my first goal at least, I haven’t find a system that works for me till now.

18

Do you mind sharing your strategy? What is the ROI you have made for the couple of months if not years?

19

How are you structuring the betting amounts? Increases in size?

If you have access, play Roulette and bet only on a fixed Dozen and stick with it. That’s the game you’re playing here.

I use a custom “grid multiplier” type of system.

20

Bonds are a fully guaranteed amazing return right now as well!

Buy QQQ or BTC, it’ll yield more than 12% average for sure… once you add DCA to it.

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21

It’s too complicated to share succinctly in a forum, and I trade futures anyway, not spot forex, but briefly it’s my own adaptation of an old strategy described in 1995 by Linda Raschke, which she called “Turtle Soup”.

I don’t use time-based charts (measured in minutes/hours etc.). I trade from volume-based bars, which I think are much better, but you can’t do that with CFD’s/spot.

It’s based on the price-action reality that most “break-outs” are actually fake-outs, i.e. they often reverse and turn in the opposite direction to that of the so-called break-out.

The original “turtle strategy” from even more decades ago no longer works, and (as she rightly said in 1995) “any turtles trying this now will get chopped up and turned into turtle soup!”. So she came up with a way of doing the opposite. It’s one of the examples of finding something horribly bad and then doing exactly the opposite. It works well for me.

Don’t ever try to look at any forum information on this. It’s nearly all completely wrong. Most people discussing it in forums (including this one) don’t even understand the connotation of the name ‘turtle soup’ and they imagine that it’s something like the old “turtles strategy,” whereas it’s actually the opposite and is based on the fact that that doesn’t work.

It’s more complicated than I’ve made it sound, of course, but that’s what it’s all based on, anyway.

If I can make about 5% per month out of it, I’m very well pleased, but it varies a lot, of course. In reality an “average of 5% per month” is likely to include monthly returns varying all the way from about -2% to about +12%. But in the long run, if it evens out at about 5% per month, I think that’s very good, and it’s far more than most retail traders manage to make steadily. Even if it isn’t quite as “steadily” as I’d like.

But most important of all, keep away from Martingales and anything similar. That’s a complete waste of your time, and your own learning process will only really start AFTER you realise that.

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