Sounds to me like he already knows quite a bit about trading. Doubling-up will work in a hypothetical example like the one he showed us , but not in the REAL world. Back in the days when I went to the race track, I fooled around with progressive betting increasing bets after losers.
If this race loses, on the next race, increase by one more unit. Go up one unit after a loss and down one unit after a win. Larry Williams mentions this kind of tactic in one of his books. He' s trading contracts in the futures market. After three straight losers or maybe three losing days , increase trades from one contract to two. He' s not talking about doubling-up; he' s talking about increasing trades by ONE unit. Please don' t bother telling me that my ' up one after a loss -- down one after a win ' example is NOT mathematically balanced; I already know that. Check it out for yourself.
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The reason it' ll make money is because more money is placed on the winners than is placed on the losers. By the way, Casey, when I grow up, I want to be like you. I want six monitors in front of me. Wayne Roberts. Hello Wayne, thanks for the comment. I certainly understand where you are coming from.. And I believe that your unit method could work; however, Martingaling is one of the oldest strategies in trading history, so there is a reason it has withstood the test of time.
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I believe that I will stick to the Martingale system because it has proven to be successful for a long time. Perhaps I will adjust it over time, but I do believe--mathematically speaking--that it has complete capability to retain profits in all market conditions. Thanks again for the comment! Good reading Nathan!
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Two questions Hey Gary, thanks for reading! My target is pips, and because of the large target, it is good to make daily entries make sure you're buying low and selling high! Essentially, no trades were ever closed until they were in profit, which means you would have to endure tremendous drawdowns. If you are able to do that it's simply a matter of waiting until the market moves in the direction you want; it always does. My response to the developers was that in that situation I wouldn't need an EA. Also, I'm sure you would agree that retail traders do not have an even playing field when trades are opened.
The past is no indicator for independent events of what will happen in the future in probability or forex. Hello Dabbon. You are a smart trader and your mathematical notation gives you credit. You are VERY right. My only objection is that in trading, there is some interference. That pip "bounce" as it is referred to in the article could happen at a place where you can't exit out at a profit though. For example, let's say you sell at 1.
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No way to exit your trade for pips profit in that case, right? Very right! That is a great point..
When I said "without a bounce" I should clarify that the pip bounce is from the latest entry which may actually be a or pip bounce from the reversal. I understand this, and still believe the strategy functions well if you stick to the rules. Thanks so much for the comment! I have to agree that the strategy is "can't fail" mathematically.
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But from a practical trading viewpoint, my own thoughts are that a potential risk of hundreds to gain only 25 dollars a time sounds nerve-racking. Hey John, thanks very much for the comment. And yes, you are right! I definitely do not recommend this type of trading to most people. Thanks for the comment As soon as you get a win; which will cover all of your losses, you begin at the small beginning amount again.
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Thanks, Bernard. My thoughts exactly! I appreciate you reading along and leaving your thoughts! Thanks for the comment. I did not say that it was simply impossible to lose 20 in a row. I said in the circumstance that you are using pips before adding and not buying too high or selling too low. The simple fact is that it would have to go 5 thousand pips in one direction with no bounce of pips after the market had already gone in that direction for a while otherwise you would not make the entry there.
That has never happened in the history of Forex on the major currencies which is why I say it would be virtually impossible I understand the adding to a winning position as well. If you have a good concept of the trend and are able to add appropriately, I think that can be a very profitable strategy; but of course, there is always more than one way to win. Is this part of the system? You are also right that the bet in the table is sometimes a bit more than double. That is part of the system in betting on a coin flip or blackjack because it allows you to get a little bit larger of a reward for your risk.
In trading, when you double the previous position each time, the net gain will always be the same as your initial target. Good article Nathan, different refreshing viewpoint. Dangerous maybe, but all strategies carry risk, and you did stress the importance of valid entries. Would like to see more of different strategies.
Gaps are hardly ever an issue if you are using a large grid to add to positions, like pips. However, if it were to gap and go against you beyond that grid, you can just add then and make a slight adjustment to your target. A gap shouldn't affect your Martingaling much. Forex Trading for Beginners. Shooting Star Candle Strategy. Swing Trading Strategies That Work.
Please log in again. The login page will open in a new tab. After logging in you can close it and return to this page. This gives us an average entry point of 1. We're in luck this time, and the market drifts down through our limit in the next few hours. At PM, we close out at 1.
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We closed out 15 pips below our average entry point.