Where was I doing that? Again, and for the last time; with proper entry positioning, black swan does not matter, even if the market goes to 1, you won't blow your account. People blow their accounts because they do it in too narrow of a range. I think the way I am suggesting is too slow for most people, but I don't know. But I know why people on ET don't do it; it's because unlike me, they can predict market direction (or at least they claim to be able to in threads and via PM), and therefore they have an "edge." So they have no need to average down, because they know where the market is going to go and can go long/short accordingly. Just read all the threads, they know price action, or know how to use indicators, or have their own proprietary indicators, or can read chart patterns, or do whatever, to predict direction. But I cannot do that, even after years of studying all that stuff, I cannot predict price direction. So I have to do it with money management.
So whats your problem? (Why did you post on elitetrader looking for help) Also, if you don't think a black swan can kill martingale, your a fucking idiot.
Already answered. Already addressed. Btw, "your" is possessive. But you're rude and not contributing to this thread, so I don't really care. Welcome to my ignore list.
Ok, so an idiot has added me to his ignore list, how poetic.... Perhaps I'm the one taking his money? Lets face facts, if the cock is making money, why would he post asking for answers on a forum full of losers? Strange? No, entirely logical... he's a cock.
There is one person here that really understands your post and is willing to help you...if only I could have received help from Maverick in my martingaling days...I would have saved so much time..But would I have been ready to listen at that time...I wonder? ES
A point to remember is that when you're running a martingale strategy, the person accepting your bets/trades is running a reverse martingale against you. At a casino, the casino wins because the casino has a much larger bankroll and because usually the odds favor the casino. The only game in which the gambler can obtain a positive expectancy is with blackjack by counting cards. You could try simultaneously running a martingale and a reverse-martingale strategy. Run the martingale with ES and the reverse-martingale with NQ. The result over the long term should be a loss of commissions plus slippage. See this discussion of the martingale strategy plus the comments at the end of the blog post: <a href="http://gravityandlevity.wordpress.com/2010/12/07/feynmans-ratchet-and-the-perpetual-motion-gambling-scheme/">Feynmanâs Ratchet and the perpetual motion gambling scheme</a> <img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=3106249">
NoDoji already cited the excellent quote by Mark Douglas: "You don't need to know what is going to happen next in order to make money." Successful trading comes down to having a certain edge, which can be very small, but still make you decent money over a series of many trades. Edge is NOT knowing what's going to happen next, it's knowing your stats, that something is MORE LIKELY to happen than the other. You sound to be pretty educated person, too educated to not understand said above, so I can suppose, you are still not completely honest to yourself and just don't want to accept this fact, that to trade well, you should learn to take losses on many of your trades. As for indicators and trading strategies, how do you know if they work or not? Did you deliberately check every trading strategy and found it has no edge? Does carpenter's hammer and other tools "work" or not, can you tell me? Let's suppose you know nothing about timbering and are given tools for that, will you make them "work" without enough practice? Same with trading. You need to study and practice deliberately to make trading tools "work" for you. There are no shortcuts. Are you completely honest to yourself in this matter too?
Let's say SPY is currently at 130. Assume an account of $200k. 130 buy $1k 115 buy $2k 100 buy $4k 85 buy $8k 70 buy $16k 55 buy $32k 40 buy $64k Total spent is $127k. I just randomly picked those numbers. I'd say the chances of SPY hitting 40 are quite low, so you could possibly be a bit more aggressive, and probably use better position sizing, but like I said, I just randomly picked these.
I have no idea what is more likely to happen. Price is random for the most part. Things like S/R work just as often as they don't, at least in my experience. No edge there. Yes. I don't even want to bring indicators into this conversation because there are entire other forums dedicated to their use and if none of those people can make them profitable, I'm pretty sure I can't, either. But yes, I've spent countless dozens of hours studying them, creating my own, testing every variation of them, reverse engineering the expensive ones, and none of them is profitable. None. And if you reverse the "buy" and "sell" orders, still none of them is profitable. Believe me, if I had a profitable indicator, I wouldn't be posting on this forum anymore because all my trading problems would be solved. That's getting pretty close to how the "gurus" talk. Let's get away from the ambiguity and riddles. I don't know what you're talking about, but I assure you that I've spend enough hours (days, weeks, months) playing with all the "tools" enough to know that none of them is profitable. Get off the guru soapbox of "oh you just need more screentime." No, infinite practice with a method that isn't profitable = not profitable trading. If you can trade with indicators profitably then you are awesome, but I can't, and I've never met anyone else who could, either. Including people who are much, much better at programming, stats, and all that stuff than I am. Yes. I'm sure I'll get flamed for this post, and I'm sure my PM box will fill up with PMs from "gurus" trying to sell me their "profitable systems" that will solve all my problems. lol. Go peddle your scams elsewhere.