I use martingale system and usually use average cost + 10-15 pips as exit strategy. Sometimes when a pair moves 300 pips for example, there is retracement where the last trade in martingale sequence is profitable but not enough to close the trade at (average cost + 10-15 pips). In those case, I want to change the exit strategy so I can take a small loss rather than waiting for months sometimes for the retracement to close the trades in profit.
Can you please recommend some alternative exit strategies to implement so I am not stuck in a martingale sequence of trades for a months and take a small loss and close early?
Here is an example where GBPUSD is stuck in martingale sequence of trades (it has hit Breakeven / average cost twice and could not close the trades as it was waiting for more retracement:
Thanks. I am using the strategy for more than a year with good profitability, where it has seen moves of more than 600 pips in some cases with reasonable DD. Will you suggest some other strategy?
On the answer, it is not an exact science and I am not looking for specific answer either. I want to explore if anyone has suggestion for an alternative exit / trade closing strategy for martingale I can use?
I’ve blown up a fair accounts over the years with martingale. Only way I have gotten out is by waiting and hoping (works sometimes haha), or by my own analysis and scalping over leveraged trades to work down the drawdown… Good luck!
Just put in a S/L which is the maximum risk you find acceptable. Otherwise, your 600 pips or more movement could blow your account. Nursing a losing trade - see below - is not only chasing losses, but also the fast track to failure, IMO.
Most traders do not manage their risk or capital very well. Better to cut losses early, and let winners run. There’s always another trade awaiting. I hate losing, but I hate losing big, more so.
Your 10-15 pip T/P is woefully short when you encounter a series of consecutive losses. And one day that WILL happen despite your profitable ride so far. Which, BTW, congratulations on your selections and entry points.
Has anybody told you that Martingale is a 100% losing strategy? You may find out in two, five or ten years, but it will get you in the end. The more you trade the more likely you are to get to the law of averages, and lose all your money.
Please read the wikipedia article linked below. If you are not mathematically minded, it’s simple. You will not demonstrate an edge by backtesting this strategy.
I agree with you. if one’s risk taking apatite is high and he takes aggressive bets martingale can be deadly. I have tested my system over 10 years data. It fails, yes, it can’t sustain Mar 2020 but rest is fine.
I am looking for alternative strategy that’s why !
