I’ve lost 7% of my account so far over 2 months. 5% of it being in the last 1-2 weeks.
I realized I haven’t been managing my money correctly, I lost a big trade then started trading smaller to make up for it, and lost another big trade and did the same thing again…
So I realized that 1 loss cut 3-4 wins, because I used to close positions too early before reaching TP while keeping SL at the same place.
[B]I’m thinking of this right now:[/B] I currently trade at 0.1 lot, and win 3-4 times out of 5… R/R at 1.5/1 or higher
[B]Would it be a good idea to trade at 0.1 lots, and increase/double whenever I incur a loss?[/B]
My account has $5k (to clarify)
You cannot assume losing trades will happen singly. If you’re losing 20-40% of the time you are basically guaranteed to suffer strings of losses. Imagine the damage if you doubled your position after one loss, then had a second one, doubled again, and had a third in a row. I you started off risking 2% per trade you’d be down over 13% in three trades (0.98 x 0.96 x 0.92 = 0.866).
I think as long as you refer to earning money as winning, nothing is a good idea. When it comes to a martingale opinions differ and I think most people would make a big mistake in doing so.
I am assuming you weren’t in a casino for a very long time. Martgingale, which is used on the roulette is in fact banned as the caisson set a bet limit so you cannot martingale forever until you win. That’s why martingale does not work in a casino because of these limits.
Do not increase your bet after series of loses.
Golden rule of trading - increase the size of your bets when your systems is working in line with the market and decrease the bet size when it is off and generating losers!
seem you had another intention with martingale sequence, like you’ve said at other thread, every method has it’s own people :).
marty it’s a high risk one, some traders soften by distribute the lot size equally (same lot size) and turn into grid method. I found interesting result, free EA actually from some Indonesian trader (at ff).
high result 70%, but also with high risk, nearly 40% DD. point is any grid, lot increasement method such martingale appear powerful method to boost the profit but also bear same portion of risk.
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I would not suggest it for beginners and probably not for most (not all) advanced traders either,
but as we both said, “every method has its people”. thats very true.
Martingale trading is high-yielding, but also very risky. Trust me, you can lose more times in a row than you think. Eventually your account will get blown. Instead, focus on keeping lots the same size (only increase when you increase your equity), and try to hunt for higher reward/risk ratio (2:1 or more). That way one win can cover two losses.
I think your broker considers you to be nuts… I considered this technique myself, just haven’ t come around to it. I would use some larger distances, but hey, I am just another nutcase on this world.
I am not saying that this is the way to go, just considered it myself. Perhaps it is time to give it a little demo testdrive.
There is one way for martingale i think is wiser to use by doubling your tp and sl and same volume lot Size
In that way you more controling on if the wave went against you
I don’t like use martingale trading system, this is extremely trading strategies because in every step order as trader willl increasing lot size, and this is also required good calculation free margin to making plan martingale step, maybe low capital will hard to use this strategy.
Because when you start with $10 and you have, as a beginner, 5 losing trades in a row you will have lost $160 and your next trade requires another $160 requiring you to have $320 to break even. What if you lose that one to?
Now consider that you are lucky and you made it up to $10,000 and you lose. You would need another $10,000 to break even. Do you have that ready?
And, as I worked for an auditor in a casino, I know that that is the reason why they introduce a maximum bet in the casino, to stop you out.
Such as stop is also in fx trading: Leverage. if you have an account (not even considering if you have enough money after losing all those trades) with a 50:1 leverage, you cannot increase you lotsize indefinetly, so a long losing streak will leave you with no opportunity to further increase.
I think your broker considers you to be nuts… 
I considered this technique myself, just haven’ t come around to it. I would use some larger distances, but hey, I am just another nutcase on this world.