Is any Martingale EA safe?
- Thread starter SergZoro
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you may want to help yourself and google a bit of how martingle sequence works.
first, martingle are not trading system to begin with, it's widely used at gambling purpose or horse race. double your bet each you got losing result.
at trading activity, does similar way, for example you trade at GU, first BUY entry goes with 1 lot, suppose your order got negative condition, you put another Buy at 2 lot when the first entry shown -50 pips, it keep going that way for each 50 pips negative count from the last entry level. while exit level for all active order is 50 pips count from last entry trade.
in short the lot sequence is 1,2,4,8,16 ... so on.
reason why many ea use this system because it's good for marketing purpose if the ea result shown an explosive performance. martingle system give a fast profit result but also had a high risk to blown up your account.
I use a reverse martingale strategy with a mirror product that ironfx are providing and I can honestly say that it is one of the safest strategies I have ever used. It is simple, I combine my reverse martingale with hedging and I am making a good return on my trades. It also helps that I am given a bonus in one of my accounts.
sensible words, and why I found many trading performance are always equipped with lot increasement method. I often reading similar thought of huge risk while doing martingale sequence. but to be honest, most profitable traders are also use same method
. found some interesting result at ff, while some account perform well while apply martingale trap EA. and good thing is he keep these pace for over 3 months at single broker account, and why I said interesting he use same trading platform Tickmill, while I still found difficult to implement same method on mine. and I totally agree the risk are account got wipe out clean, especially when do the double lot increasment as you mention.I was contacted by ironfx in regards to their mirror product and they spoke to me about his martingale EA. They also told me that I am allowed a 100% sharing bonus on one of my accounts which makes it sound too good to be true. I haven't opened an account yet because I am reviewing some other products they have but this one looks good. What is your experience? You posted this a while back so have you done any more trades? Any profit/loss?
Hi Jonathan, I have been using the reverse martingale strategy at ironfx and I have gained a good return so far. I have made a few losses but overall my profits out-way the losses. Just like you said you are allowed a sharing bonus that they offer and yes it is 100%. It looks quite bulletproof so far. I would definitely suggest it to you but you need to have a clear understanding of this strategy though.
Thank you for your comments David. They have been helpful. I got in contact with an individual at Ironfx and he spoke to me about this further. I gave it a go and yes as you said it seems to be a good way to make a small but good return. I am assuming the more I trade the higher my return will be. I've lost some trades but I have won the majority. I am using the ea and it doubles up my volume every time I close my position in profit on the live floating spread account I have been given. It looks promising. Thanks for your comments.
NO, because "ANY" in your question!
If you correct your question in "SOME" then YES!
because martingale EA depending always:
-coder skills!
-which type of martingale? (open, close, hedged, casino)
-and more money then trading the old school style
my2c
ProFXManager
If you correct your question in "SOME" then YES!
because martingale EA depending always:
-coder skills!
-which type of martingale? (open, close, hedged, casino)
-and more money then trading the old school style
my2c
ProFXManager
The martingale EA is very profitable for an adversary of such an EA - i.e. broker.
if you trade a async open hedge martingale, you'll be always safe, it isn't the often associated martingale cash cow, but stable and reliable recovery, except your account lacks of equity.
ProFXManager
PS: yes, async open hedge martingale needs some bigger balls, you have to understand and trust...
How does async open hedge martingale operates? What are its differences from the simple Martingale strategy?
Ok, the well known (casino) martingale is doubling stake after a loss, in forex: open an order, sl hit, new order lots doubled
async open hedge martingale:
open: no orders are closed, NO SL, ONLY TP, TS
hedge: you hedge async buy/sell
async: the positive swap side sum is higher or equal then negative side, to equalize, or win swaps
how to get async lot ratio, example:
eu buy swap +1
eu sell swap -2
ratio= 1:2 (most pairs have 1:<1.5!)
so buy orders must have minimum double lot then sell orders.
in live:
open a buy order 0.2 lots, market drops
after a defined step you open an buy 0.4 (martingale) and a sell 0.2 order (async)
sum:
buy 0.6 lots
sell 0.2 lots
sum: 0.4 buy lots effective, but you have a hedge the 1st 0.2 buy with a 0.2 sell hedge order at different price positions
if the market goes up, your 0.4 buy draw-close all orders together, after reaching a defined tp, ts!
price action example attached
the trick is to know the ratios, the vola, the price (action) of a pair= no indis required!
async open hedge martingale:
open: no orders are closed, NO SL, ONLY TP, TS
hedge: you hedge async buy/sell
async: the positive swap side sum is higher or equal then negative side, to equalize, or win swaps
how to get async lot ratio, example:
eu buy swap +1
eu sell swap -2
ratio= 1:2 (most pairs have 1:<1.5!)
so buy orders must have minimum double lot then sell orders.
in live:
open a buy order 0.2 lots, market drops
after a defined step you open an buy 0.4 (martingale) and a sell 0.2 order (async)
sum:
buy 0.6 lots
sell 0.2 lots
sum: 0.4 buy lots effective, but you have a hedge the 1st 0.2 buy with a 0.2 sell hedge order at different price positions
if the market goes up, your 0.4 buy draw-close all orders together, after reaching a defined tp, ts!
price action example attached
the trick is to know the ratios, the vola, the price (action) of a pair= no indis required!
Attachments
Last edited:
Thank you for an explanation, but it appears that this strategy poses the same risk as the ordinary Martingale system. Additionally, it costs more in swaps and spreads (closing the initial 0.2 buy is cheaper than opening a hedging 0.2 sell in terms of swap and spread), and also requires more margin (for brokers that do not support zero margin hedging).
cant be the same risk like ordinary (closed) martingale because an async open hedged martingale differs completly.
you are right with the margin, but most broker give 25-50% on hedged positions,
(never seen zero margin broker), so +50% margin is required.
and you are not right with swaps, if you async your lots you can be equal or win (little) swaps!
try it! take a little time, do it basic manual by one pair, you'll be surprised, it works and yes it is not a cash cow, but helps to recover trades, minimum breakeven, with patience to good profit. martingale is used to reduce the needed retracement pips!
you know:
if a trade go south 100pips, you need 100pips to north to be breakeven (w/o spread), with hedge, async, martingale you need approx. 30-50pips north to breakeven, depending on pair, vola, lots, ratio and so on.
this is a new safe way to deal with martingale, away from the well known casino martingale which is dangerous without additional security features.
You are yet to show how is it different in its effect on the bottom line.
Let's take, for example, +1 swap on long and -1.1 swap on short.
Here is the math:
In normal martingale: you had 0.2 long and closed it. Opened 0.4 long in its place. You will be getting +0.4 swap.
In your described "open hedged martingale": you had 0.2 long, which you decided to hedge with 0.2 short instead of closing, and open additional 0.4 long. You will be getting +0.38 swap total.
0.4 - 0.38 = 0.02 loss on swaps.
Unfortunately, it is not. It is just another way to lose unless you are infinitely rich.
sorry I wrote "async open hedged martingale"!
async: the positive swap side sum is higher or equal then negative side, to equalize, or win swaps!! which means your positive swaps lots must be in relation higher then the negativ swap orders.
we start buy 0.2, market drops, we open, lets say after 100pips
new buy 0.4, new sell 0.2
sum open orders:
0.6 buy = +0.6
0.2 sell = -0.22
sum 0.6 - 0.22 = +0.38 swaps, worst case to wait till yor swap give enough profit to breakeven, but normally you can close all orders after 30-50pips retracement (depend on pair)
and yes i know this is not "old school" trading and yes most people are scary about "hedge", "martingale" but no one testing it in combination with security features.
..prejudices are just great.
martingales and brownian motion are used in financial mathematics:
http://en.wikipedia.org/wiki/Martingale_(probability_theory)
http://en.wikipedia.org/wiki/Brownian_motion
and this doesnt have anything to do with the well known casino play
You have just described why it is worse than simple martingale strategy when a trader would just close the original 0.2 buy out and open only new 0.4 buy (better, just open additional 0.2 buy, without closing the original, but that's a minor detail). 0.4 buy would be earning +0.40 swaps vs. +0.38 swaps in your case. In all else (except higher margin requirements and more spread losses) your async open hedged martingale appears to be the same as the normal martingale.
martingales and brownian motion are used in financial mathematics:
http://en.wikipedia.org/wiki/Martingale_(probability_theory)
http://en.wikipedia.org/wiki/Brownian_motion
and this doesnt have anything to do with the well known casino play
Both theories (even if you assume their validity for Forex market, which is very doubtful) do little ground to what you describe as async open hedged martingale. What you are looking for is called reversion to the mean, and its validity in Forex has not been proven too.
oh bro, its proven, i trade price action, hedges, martingales, 1324 management since over 14 years, on futures and forex, but as i said earlier, its not "old school", but back to the thread question:
YES, its safe, as long you use martingale with several security features, you will survive bad times like CHF hell. If not, you blow your account as usual with standard (casino) martingale. My personal mention!
also "reversion to the mean" (stocks) is not possible in forex, pairs like gbpjpy have a max pips range of 13.500 pips in the last 10 years, you need big balls and unlimited equity to get (back) the "mean"...long term isnt my trading style, only short+medium.
YES, its safe, as long you use martingale with several security features, you will survive bad times like CHF hell. If not, you blow your account as usual with standard (casino) martingale. My personal mention!
also "reversion to the mean" (stocks) is not possible in forex, pairs like gbpjpy have a max pips range of 13.500 pips in the last 10 years, you need big balls and unlimited equity to get (back) the "mean"...long term isnt my trading style, only short+medium.
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