Martingale Trading System in Forex

I believe my friend and his family has invested a good deal of money in a Ponzi scheme, help wanted

I have also asked /investing with the hope of getting more technical information about it. I realize though that PF had more people and has much more attention, so here goes.
A week ago, a business associate of mine told me that he had 'The deal of a lifetime' that I would be 'stupid for not allocating company money to'. Both of these were huge red flags, but I figured I would entertain him and read over the brochure he sent me for this 'company'.
Long story short, they are trading gold & Forex using a martingale) system on margin. I have tried to explain to him that using a martingale doesn't ever work in the long run, unless you have infinite capital, which of course he nor this 'company' have. His family has 'invested' in it for the course of about a year. Between just him and his dad they have I believe $75k in it, his mom has more he believes but isn't sure the exact amount (I have reason to believe that it's more than him and his dad do together).
He and his dad have done some test withdraws from the company, and they seem to work. I told him he'd be wise to withdraw the entire amount and just say good riddance, but his dad is convinced it's legitimate because he's been collecting 2%-3% per month for over a year. He realizes that if I'm right, it'll be an absolute disaster for his family, but is convinced that I'm wrong because I'm not an established stock trader.
So, in the end I'm hoping for a better argument that i can make to him.
submitted by schockergd to personalfinance [link] [comments]

Forex Martingale Strategy

Forex Martingale Strategy
My name is Marek Hawk and I am a professional trader of Horizon Trading team. For today’s article we selected a controversial topic often discussed in trading community, it is the Martingale trading system. Would you be interested in a trading strategy that is virtually 100% profitable? Many finds this system as gambler’s tool with high risk exposure and they do not think about starting with the Martingale at all. But the Martingale strategy is based on probability theory, and if your pockets are deep enough, it has a near 100% success rate.
Does it really work? Is it possible to win always in the end? Let’s find out!

How Martingale Works

The Martingale system is a simple process that involves doubling your bets after a loss. The idea is that if you can make a trade that offers probabilities, you eventually win and make enough money on the win to cover all your previous losses, and have a profit left over equal to your first bet.
The Martingale is a mechanism of placing double bet in case of loss.
A martingale strategy relies on the theory of mean reversion. In the end you should win at some time, the theory says, and you should make a profit. Let’s look at mechanics of the martingale system.

Examples of the Martingale Strategy

Let’s assume trading strategy which works with 1:1 risk-reward ratio and initial risk for first trade is 100 $. Your initial account balance is 10 000 USD.

https://preview.redd.it/43szidw2w9b31.png?width=635&format=png&auto=webp&s=443f0d0f241e73e094ae197636ca5ad83a184cb5
First trade was speculation on growth and your long trade worked out. In another situation you found an interesting entry level to open the new long trade, but the speculation did not work out and you are back to the initial bankroll value. Next trade you needed to double your risk and you needed to open a larger position to cover the previous loss and to gain profit. Unfortunately, you suffered another loss and you had to double your risk again to 400 $. Next trade you won, and your equity raised to 10 200 $.
The problem with the Martingale is the situation when you get a long streak of losing trades. You must always double your risk and in the end your last trade in the row could be huge portion of the capital, and you can be still wrong…

Money Management of the Martingale System

While the Martingale System seems like a fantastic way to make money by trading, it’s not a good solution in case of money management. In pure mathematical terms the system is bulletproof, however, in the reality of the trading world it’s full of problems. The main issue with the Martingale is that it requires an extremely large capital. Let’s look how you would carry on with the system with your equity of 12 200 $ in case of losing streak.

https://preview.redd.it/rfk9vaa4w9b31.png?width=551&format=png&auto=webp&s=43662d8b5bde4f6495dee7cdb66756f6165483d6
With initial trade which was less than 1 % of your capital, you suffered 6 losses with the Martingale system, and you are done. It is not possible to continue with doubling your risk as you run out your capital for next trade and you end up with the drawdown -6 300 $, more than 60 % from the peak of equity! Because of this reason, it is necessary before putting the Martingale system into the real world, to know statistical attributes of your trading system. You can use useful mathematical and statistical applications, like MATLAB, and run statistical simulations, like Monte Carlo, which are widely used in trading industry. You need to know a precise output of your strategy in matters of your risk and money management!

Example of Monte Carlo analysis and the equity of various scenarios of the Martingale Strategy. For gaining more than 50 %, the system had to overcome even negative results. The account would be wiped out many times.

Usual equities of robust trading system simulated by Monte Carlo analysis.

Trading Forex with the Martingale

One of the reasons the Martingale strategy is so popular in the currency market is because, unlike stocks, currencies tend to go back to their mean. Although companies in term of probabilities can bankrupt more often, countries cannot. For example, even if currency is devalued or depreciated, the chances that currency's value reaches zero are very low.

Principle of averaging the price of the Martingale trading strategy.
The forex market also offers the ability to earn interest which allows traders to offset a portion of their losses with interest income. This means that a martingale trader may want to only trade the strategy on currency pairs in the direction of positive carry. In other words, they would buy a currency with a high interest rate and earn that interest while, at the same time, selling a currency with a low interest rate. With many lots, interest income can be very substantial and could work to reduce your average entry price.

Conclusion

In this article I described principles of the Martingale trading strategy. The system may look like a perfect winning system; however, it carries huge risk exposure of your capital. A trader needs to be prepared to work on professional money management techniques in case of building working Martingale system. I gave you some hints which tools can help managing this mathematical trading system. I described the examples of trading the Martingale trading techniques on forex markets.
submitted by Horizon_Trading to u/Horizon_Trading [link] [comments]

I'm looking for legitimate track records of any forex algorithms that have consistently generated 100%+ returns in live trading.

Not looking for the record of scalping bots, arbitrage bots or martingale betting systems.
I'm wondering if there's anyone out there that has been able to consistently generate 100%+ returns live trading with a forex expert advisor.
Looking to compare strategies.
submitted by darbsllim to algotrading [link] [comments]

Binary Options & Profitable Win Rate

Hello there /forex! I actually fired this question off in /math and was met with crickets there. My question has to do with the math behind a sub-martingale betting strategy for Binary Options. Here's what I was thinking...
Basically I want to see if there is a mathematical way to compare two betting styles and the % win necessary to be profitable trading binary options.
I am not quite sure even of how you would set this up mathematically to solve your expected break-even point, after tinkering in excel, I found the number to be somewhere close to a 58.7% win rate on straightforward betting (with a 70% payout). Here's where it gets more cumbersome. If you were to approach the problem with a martingale style betting system, (whereby you double up your bets with each consecutive loss) would it have any impact on the % break even win rate? Lets assume the max consecutive losses I am willing to make is 4, is it more likely that I will reach a point where I have won all the money back to exceed my max loss (4 losses in a row = $75 max draw vs. probability of winning enough bets to overcome $75) and is the win rate to get there less than that of straightforward betting? For an example...
So based on probability, what is the necessary win rate to have a sub martingale (winning bias over my max loss of $75)...and is it lower than the win rate of straightforward betting? Sorry for not having a clue on how to calculate this...hopefully this has perked some interest and someone is up for the challenge. Thanks and sorry for the poorly explained example, I can try to clarify what I mean if its unclear.
TL:DR Does the necessary win rate to be profitable on a fixed payout system change with a martingale strategy?
submitted by snows4 to Forex [link] [comments]

Fuckup stories game

Ok so most of the time we are talking about success and how did we come to that. But what about failures? I personally believe that failures are even more educational than success stories. So, can we play a game? Everyone who wants to speak… can write down his story here (hahaha sounds funny but you know what I mean) and share it with our community. 4 basics rules for our game:
  1. You can write one failure.
  2. Keep it short.
  3. Make it funny, if possible.
  4. What did you learn from that (one sentence).
So I will start with my own story. When I was 16, my father talked about forex trading. I was interested and then he sent me some information and links about the basics. I also wrote down some kind of a research paper for my high school competition. I was rewarded for paper and got like 200€ for that research paper. I added all of my savings (550€) and I was ready to start trading on forex with 750€. But then I saw some website add with sign “no work, 5000€ per day blah blah blah”. It was for playing a roulette game in an online casino with Martingale (betting system), which is doubling every bet when you lose, but you have to bet only on black or red. I thought to myself: “Wauu what a cool system, and it can really work for me. Easy money and then I can even start on forex with more money.” My starting budget for online casino was 500€ and I actually made 250€ on my first day. I was like wauu, ouuujeah, even the sky can’t be the limit anymore. :D My thoughts were all about buying cool clothes and a car. But in the next day I lost 500€ and day after that the whole budget. I was eager to get everything back. On the fourth day I invested another 250€ and guess what? Yeah, I lost everything. I think that the ball stopped on red, 14 times in a row. After that it was over between me and forex. How can you trade forex with no money. :D
LECTURE: Never, never and never even think that you can beat an online casino system on roulette and make constant money.
submitted by Flyslovenc to Entrepreneur [link] [comments]

The Martingale Betting System Explained and Debunked 7 Tips To Profit With Martingale Strategy In 2019 Martingale Betting System - YouTube Martingale Forex System Doomed to Failure Martingale Strategy- 3 Ways To Use Martingale Betting ...

Martingale System Introduction. The martingale systems are widely used casino, sports betting, but the principles are also used by many traders in the financial markets. And not only that. Martingale’s principles are often part of the automated trading systems. How do you recognize a martingale trading system? Usually by the fact that the ... Martingale trading systems are very popular in Forex automated trading because it’s quite easy to create an expert advisor that would look interesting and attractive using martingale. A system developer can back-test his martingale idea on an optimal history to show charming results, and with a bit of luck, he can even show equally charming ... Martingale system is a popular betting and trading system, which is commonly used in bets with equal or close to equal chances (red-black, odd-even, heads-tails etc.) According to martingale system gambler (trader) should double his bet after every loss and return the bet to initial amount with every winning bet. E.g. gamblers bets $10 on red, if he wins he bets $10 again, if he loses he bets ... Forex Trading Using the Martingale System. Most forex investors (traders) will probably reply with a resounding “Yes!” if there were asked whether they would be interested in a trading strategy that is practically 100 percent profitable. Amazingly, such a trading strategy exists and it dates back to the 18th century. This strategy is mainly ... The Martingale System is a betting strategy that has the gambler doubling his bet after every loss. It was popular in 18th century France before the days of television, where people had little else to entertain themselves with. Learn how to use the Martingale system to win more and use the FREE bankroll to practice online. A beginner's approach to the Martingale betting system. The Paroli Betting System, which is also widely known as the Reverse Martingale betting system, also takes its roots from its way older cousin the Martingale System. This particular betting system is the direct opposite of the Martingale betting system and falls under the positive progression category which is a safer option for gamblers to use in order to minimize the risk of depleting their ...

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The Martingale Betting System Explained and Debunked

A simulation showing why the Martingale betting system, in practice, fails. Martingale Strategy- 3 Ways To Use Martingale Betting System For Any Size Bankroll By Professional Gambler Christopher Mitchell. In this video, Professional ... Forex Strategy #1 - Swap Martingale - Easy - Low Risk - Low Return - Duration: ... Martingale Strategy- 3 Ways To Use Martingale Betting System For Any Size Bankroll. - Duration: 8:19. Change Your ... 95% Winning Forex Trading Formula - Beat The Market Maker📈 - Duration: 37 ... Why The Martingale Betting System Doesn't Work - Duration: 5:40. Looking Glass Universe 70,941 views. 5:40 ... Trading forex with a Martingale system is almost certain to result in a blown up account. Shaun Overton uses money management software to illustrate the mathematical inevitability.

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