Glorifying Martingale

Filed Under (Journal) by Casey on 18-06-2010

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Paul Pierre Levy the guy who came up with Martingale

Paul Pierre Levy the guy who came up with Martingale

Well.. the demo page is up and it looks fun.

Anyway… I have notice lately that there seems to be a direction which the commercial EA is going back into. Namely Martingale sort of EA. Then again it’s just probably it is just me who is keen to look for Martingale EA to add to my Megan account.

I can not but accept the fact that Martingale EA can produce a very nice linear graph with minimal drawdown. My approach as seen it last for as far as 6 months. Going through all the news and volatility of the market which is probably one of the reason why it affirms my believe that my approach to Martingale is probably correct.

I feel that there are many ways to play with this strategy.

Martingale EA is a double edge sword, one side being sharper than the other. The question is how to handle the sharper part of the sword. Some people say money management, some people say hedging, some people say diversify.

Now money management for these sort of strategy is very confusing. I have tried to read about it in the forum and people seems to say that it is how we manage our money is what makes a differences. I still can not connect the dots with regards to this matter. If we are taking bigger lots downwards… to what extend to we manage our money? Stop all when equity runs below 20%? But that is just it isn’t it… for Martingale to work… we need the drawdown and with the idea and assumption, that the price will rebound (that is assumption approach to most Martingale startegy) to soon recover our position.

For hedging… I can understand that. I have seen it happen with my GoMarket account and the thing is, that is a good way to stop your account from getting fried. But the question with this approach is that how does one remove the hedge to ensure our equity builds up or even recover from drawdown position?

Diversifing well… that approach those seem to hold some water. I am probably diversifying with 4 accounts and gawd knows how many EA I have already put on this account together with my rebate strategy… I seem to be holding on nice little profits.

But that is just it… nice LITTLE profits which can be wiped out anytime.

Hmmm…. I seem to have another idea of how to manage one of my EA which I am testing right now.

Anyway… Martingale seems to be the way forward in the EA community world. Every one seems to be moving away from scalping. Or rather that is the sentiments and vibe that I am getting from the forums.

It is that reason that I am now focusing my spare time to seeking out Martingale sort of EA and my secondary focus is on whatever EA that makes sense.

Maybe it’s the excitement of trying to get away with Martingale strategy in forex. Hoping that, that time of reckoning will not reveal itself. I guess this is one of the reason why I feel that backtesting and demo account should used to test out these sort of EA.

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