Even if you double down every 5 spy points in 2008 you'd be buying 4 million shares by the end at a margin of 260 million dollars
No you don't... exponentially averaging down is a one way road.. no recovery - unrealistic sizing. do the math on paying yourself a penny a day.. doubling every day for 30 days. Incrementing size at regular linear intervals allows you to shape the retracement profile necessary for an exit. Adding 1 x original size every .50 requires a 50% retracement to break even. The general idea is to have many exits near entry without scaling size before your position gets drawn down locking you in for the long haul.
Right, 5 pts was a bad example. Say 20 pts. He could solve for the number to not exceed max leverage. But he would only be long 100 shares for the better part of 10 years and hence earn less then a CD.
What? Who is using margin? Oh, maybe I should've mentioned that in the first post. I want to do this without margin. Right now SPY is like $130, so 100 shares would cost $13,000.
Is having a 100% risk of ruin important to you? Because that's what you have long-term with any Martingale strategy.
You misread the first post. Please reread it and rejoin the conversation when you understand how there is no risk of blowing your account with proper position sizing and pricing. We're not talking Bollinger Band martingaling that causes people to blow their accounts when price moves 10% or anything like that.