How much money would you need to Martingale your way to profits?

Quote from nLepwa:

He meant add to your position when it goes with you instead of against you.

Anyway just like martingale it doesn't turn negative expectancy into positive one.

Ninna
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It makes a small move against you potentially turn into a loss.

I never understood averaging into a position. It raises your average cost. Sure, you can potentially pyramid your way to a huge gain, BUT a small move against you changes it into a loss.
 
Quote from 1a2b3cppp:

I think the difficulty becomes choosing a profit target. Sell too early and miss out on potential MASSIVE profit.

I wish I still had my shares of QLD from back in the day, but I sold them a while back.
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You do understand the two main issues here right? One, having enough margin to last all the way down. And two, not having enough shares on if the market just rallies. Then you don't make any money. You need to understand these issues.
 
Quote from Maverick74:

You do understand the two main issues here right? One, having enough margin to last all the way down. And two, not having enough shares on if the market just rallies. Then you don't make any money. You need to understand these issues.
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One: not an issue with a big enough account size and/or proper position sizing.

Two: that's a potential risk. You could buy your smallest first position and then the market goes up 50 points = you only get a small gain.
 
Seems like there could be a lot of "float" (is that what it's called?) using this method.

For example, during the year of 2004 the entire yearly range of SPY was $10. So you probably would've sat on your money and done nothing the entire time, potentially in the money or out of the money, waiting for something... to break out of the boring $10 yearly range.

I'm not really concerned with making instant profits, though. I've sat through years of drawdown (or float or whatever it's called) before. It's not really a big deal to me.
 
Quote from 1a2b3cppp:

One: not an issue with a big enough account size and/or proper position sizing.

Two: that's a potential risk. You could buy your smallest first position and then the market goes up 50 points = you only get a small gain.
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Yes, and you end up making .5% a year. Just buy a bond.

The account size doesn't matter because you will adjust your purchases for the account. The margin on SPY is terribly unattractive. Run some numbers and you'll see what I mean.
 
Quote from Maverick74:

You do understand the two main issues here right? One, having enough margin to last all the way down. And two, not having enough shares on if the market just rallies. Then you don't make any money. You need to understand these issues.
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I don't think you understand the issue if the market lost 66% of its value you'd be in over a trillion dollars forget having no shares its not possible because the theory says you must keep doubling down but even if you started with a dollar there aren't enough shares in the world to keep the theory plausible even if you had the money
 
Quote from david666:

I don't think you understand the issue if the market lost 66% of its value you'd be in over a trillion dollars forget having no shares its not possible because the theory says you must keep doubling down but even if you started with a dollar there aren't enough shares in the world to keep the theory plausible even if you had the money
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Well, that is why I brought up the margin issue. I don't think he understands how much margin one needs. In theory he could set really wide brackets. Say buy 100 shares of SPY every 5 pts down but then we get to the other problem of having no shares.
 
Quote from 1a2b3cppp:

Please explain what you mean by this.
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Like the other poster said, with Reg T margin and doubling all the way down you are going to need potentially billions of dollars. The margin for 100 puny shares of SPY is 6500. That is insane.
 
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