Reverse Martin Gale strategy

[charts]

Quote from Xman:

Interesting for you to say that. I like to use channels for trend identification, they seem to last forever in the larger time frames, yet on the small ones their life-bar is very limited.

X

... you can search from these posts:

"In thinking out time frames it is necessary to understand that you cannot substitute a 10-period moving average of 1-hour bars with a 40-period moving average of 15-minute bars. Similarly, you cannot substitute a 10-week average with a 50-day average.

It seems natural to think that any two trends covering the same time span will give the result, but that is not the case. Although, we can average many data points, we cannot get rid of all the noise; fewer data points over the same time span will always yield a smoother result. Therefore, the use of hourly, daily, and weekly time periods multiple time frames gives a much different picture of the market than simply using three different moving averages based on the same data.

It is much easier to see the major trend using weekly data, find the short term direction based on daily data, and time short entry using hourly bars."

"Just finished an analysis of the SP market. For the analysis I used the SP data from 1989 - 2001. Here's my results:

The data from 1min. resolution per-bar through 30min. resolution per-bar is primarily in a trending mode. If planning on building a trend following system or intraday breakout, then these are the bar intervals I'd review.

The data from 60min. resolution per-bar through 1 week resolution per-bar is primarily in a contra-trend mode. If planning on developing reversal systems, then these are the lengths I'd consider.

The monthly data reverts back to trending mode, so if you need something to time long term investments (like mutual fund infusions), then this is the interval I'd use.(ex. 200 day MA).

The data itself proved to be remarkably stable within the time frames. For example, the 30 min. bars had good trends in 11 of the 13 years. Likewise, the 60 min. bars had good contra-trends also in 11 of the 13 years.

I did this analysis to get ready to build a really good daytrading system. Since daytrading is primarily concerned with the shorter bars, I'll have to look to building a system with the 1-30 min. bars using either a breakout or outright trending idea. "

 

[Index piker]

Quote from salvador90:

congrats... you have just described anti-martingale (bigger positions the more your equity grows, smaller positions when your equity decreases) and pyramiding positions...

Pyramiding : the art of blowing out your
account with what was a previously profitable trade.

 

[MKTrader]

Oscar's Grind is another type of anti-Martingale strategy. It's mostly used in casinos, but could be applied to trading. Like Martingale (and unlike pyramiding), it only seeks to make 1 unit of profit and then starts the series over again.

 

[crash n burn]

anti martingale = martingale = fixed size bet = anything else

if you gave an edge all will work, if you dont no one will.

focus on achieving an edge all the rest is secondary.

 

[salvador90]

Quote from Index piker:

Pyramiding : the art of blowing out your
account with what was a previously profitable trade.

 

[IronFist]

If you add to a winning position with increasing position sizes (as in a true anti-martingale), then your breakeven post gets consistently higher and it's easy for a huge winner to turn into a loser.

That being said, you'll have to establish a criteria for WHEN to exit with a profit, just like martingalers have to decide WHEN to stop adding and call it a loss.

 

[salvador90]

Quote from IronFist:

If you add to a winning position with increasing position sizes (as in a true anti-martingale), then your breakeven post gets consistently higher and it's easy for a huge winner to turn into a loser.

That being said, you'll have to establish a criteria for WHEN to exit with a profit, just like martingalers have to decide WHEN to stop adding and call it a loss.

that's why it's called pyramiding and not inverted-pyramiding.

Pyramiding assumes the first entry is the largest, and the new entries from there on are smaller and smaller the more entries you have. Pyramiding if done correctly can make a whole year... we have to take advantage when trends are active .

I've had trades that I added 9 times, AFTER my original entry ! the additions made up around 60% of my profits

 

[FeenixRizin]

Quote from Index piker:

Pyramiding : the art of blowing out your
account with what was a previously profitable trade.

how do you blow out your account with a profitable trade?


answer: let it turn into a loser.


question: why would anyone allow that to happen?

 

[Index piker]

Quote from FeenixRizin:

how do you blow out your account with a profitable trade?


answer: let it turn into a loser.


question: why would anyone allow that to happen?

Just start Pyramiding your winning trades and you will figure it out.

 

[FeenixRizin]

Quote from Index piker:

Just start Pyramiding your winning trades and you will figure it out.

I'm not familiar with Pyramiding ... outside of Amway.


risk/money management is everything ... if you're up, you have virtually no risk. (depending on your timeframe of course)