Mathematically, a martingale, anti-martingale, or any other position-sizing strategy cannot in the long run make what has negative expectancy profitable.
Martingale system in Trading
- Thread starter osho67
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Mathematically, a martingale, anti-martingale, or any other position-sizing strategy cannot in the long run make what has negative expectancy profitable.
For those who are trading with an edge, using a martingale approach to betting will guarantee underperformance. The best trades will have less exposure than the losing trades.
One should put more chips in the pot when the higher probability trades come up.
Martingaling works best when one does not have an edge, and only for so long.
One should put more chips in the pot when the higher probability trades come up.
Martingaling works best when one does not have an edge, and only for so long.
Thats what I said before. Perhaps you misunderstood.
Not true. It's like comparing apples to oranges.
Nothing will change an absence of edge, not martingale, not anything, regardless of the length of time employed.
That's what I said.
Martingaling is a crutch for not having an edge. The end is always the same. It works better for systems without an edge in that it tends to make great profits before eventually collapsing.
If one has an edge, one would not need to martingale. One would put on all or most of the position at one time, so as to maximize profits.
Martingale works but it has to be with a system that has a definite edge. You have to start small and have a huge account. You have to know where to add and in what amounts. The trade has to be a retracment or a counter trend move. The trade has to be putting you back in line with the trend.
The adds have to be based on the system having an outlier day. In other worlds you system still has to be intact.
The adds have to be based on the system having an outlier day. In other worlds you system still has to be intact.
Since most losers average down in a trend move (martingale of sorts), then averaging up in a trend move (anti-martingale of sorts) is ENOUGH to give you a workable edge. Even with random or mediocre entries. The exits and risk management are critical however.
A system like this makes most/all the money in the opportunities that one had a chance to add the contracts. (trends).
I repeat that risk control, especially adjusting the risk stop after adding cars is what makes or breaks this type of method.
I wish asap posted a chart of a short-only method in the same period he posted of a long-only DAX method. This would show that entries and direction bias are basically irrelevant, and all the money is made when the bigger sizes can be put on (trends in favor).
Imagine that, entries and direction bias IRRELEVANT, and only exit/adds to work on...EXACTLY the opposite of what everybody else is looking for: A no-lose magic entry method. It figures...
Just my 2c.
JW
A system like this makes most/all the money in the opportunities that one had a chance to add the contracts. (trends).
I repeat that risk control, especially adjusting the risk stop after adding cars is what makes or breaks this type of method.
I wish asap posted a chart of a short-only method in the same period he posted of a long-only DAX method. This would show that entries and direction bias are basically irrelevant, and all the money is made when the bigger sizes can be put on (trends in favor).
Imagine that, entries and direction bias IRRELEVANT, and only exit/adds to work on...EXACTLY the opposite of what everybody else is looking for: A no-lose magic entry method. It figures...
Just my 2c.
JW
I do this every day.
Billions
Billions
Isn't this the same thing (basically) as averaging your losses?
Jesse Livermore said not to do this 100 years ago.
