Recent content by KevinQBD

I found the reason why I titled this thread with 'unbreakable' http://www.investopedia.com/articles/forex/06/martingale.asp Basically it is unbreakable if you have unlimited cash and can buy all the way down to 0. Also, I discovered another name for this strategy is Trend Fading.

C99, I think you nailed it, thanks. Scale Trading appears to be the term I was looking for. This article describes it very well: http://www.turtletrader.com/junk.html It also describes the downsides of this technique, which confirms the same downsides I saw in my backtesting results...

Thanks for the reply and information. I did do some backtesting. I actually wrote some software to test my volatility theories on historical data (I'm a software engineer by day). http://www.quantumbitdesigns.com/VolatilityTrader.png It turns out the 3x funds work fantastic for this...

(Disclaimer: This strategy results in a total of 6% return using SPY from the October 2007 highs until today. From October 10, 2008 it results in a 17.62% return) Desciption: If one were to buy on a 3% drop and sell on a 3% gain, and repeat this process, is there a technical name for this...