thank you for all the replies, please keep them coming. The reason why i posted this here is because we got into an argument on the doubling positions all the time when in a loss rather than accepting and taking a loss.
True pros pyramid into strength, not weakness. Unless scaling in/out is part of your strat. you will be doomed martingaling unless you have unlimited funds, which you don't.
No it will not work. Roullette is a minus sum gain as the casino has the edge due to the 0 and 00 outcomes where both red and black lose. This is a bit like costs of trading (software, exchange fees etc) in trading. Doubling up on a loser is a mugs game IMO. Sure to work if you have bottomless pockets, but who does? LTCM? FACT: You enter a game tossing a $1. Heads you win, tails you lose. If you lose, you bet $2, then $4 etc. If you get a string of 42 losses, you will be betting more than the worlds combined aggregate wealth.
its very hard to talk him out of that strategy, because he had like 45 winning days in a row, his confidence in this is off the scale. We trade together so i fear he tanks our joint account.
All it will take is that one day when you are on the wrong side of a huge move with too many positions in and it's hello margin call. Trust me, it's not wise. He should consider himself lucky, take his winnings, and spend some time on a strategy. Try the 15-min range breakout method for a while, that has a strong win/loss %.
Not wise is an understatement - silvermotion if this buddy is so stupid to not see what is wrong with this "strategy" then you do not want to be sharing an account with him.
Ok, so let's look at this from game theory, which is loosely what martingale is based on. Game theory must surely be screaming he is do for a lose. What is his stats? Cmon how long can a win streak go, seriously. Dude get your money and run, he is a disaster waiting to happen. I wish I could post the picture of PTJ, losers avg. losers, classic.
want to lose your money real quick i guess. let your partner try this on his own , with real money & see what happens , once he starts taking big losses, his mindset will change , he may have to learn the hard way.. don't let his crazy dream drag you down.. only add to winning postions , is a smart idea. good luck with your venture..
Better yet, take what the market gives you and be thankful. Remember this: Bears make money. Bulls make money. Hogs get SLAUGHTERED! Don't be a hog.