Captain, That is the thing. I don't know if it works in the long run. Wish I knew. It has been profitable but then again most martingale systems are "at the beginning". I suppose a simulator would be in line. Thank you for your brother's story. Were the 3 year profits enough to cover the big loss ? I sure hope so.
I do not think it is as easy as just picking the highest volume stocks from the list. Overal market direction is 70% of a stocks movement...Everything can go bad at the same time...oh dear depending on earnings in the upcoming bear market can be challenging. I like currencies so much more....(when one goes up... the other goes down) Michael B.
I think everyone would like to know if their system will work in the long run. They all work...till they don't, then what? Sounds coy, but it's the truth. I think it's best to have more than one tool in your tool bag. My brother still came out ahead at the end of that 3 year run, but it really messed his head up. That was 2 years ago and he still can't pull the trigger on a trade. I took my own beating in 2000 and quite frankly I still trade with scared money. It's a hump I have to get over if I ever expect consistant profits. It's not like a total account blow up will destroy my personal finances, but I just can't get it out of my head that I'm to old to keep starting over. 54 ain't that old, but it's along ways from being a kid. Anyway that's my ramble for this morning. Just keep an eye on your money management and I think you're in good shape for the time being. Famous last words. LOL!
Why do I get that familiar sickening feeling when I read this in italics below.... One thing is correct, however. Measuring the volatility and assigning a value to the size of the "add to" is valid. you must figure in time to the mathematics of the "thing" too..retraces and resumptions become very important with martingale... Remember, the market has no idea as to your condition or your entry point timing... However, if the play ends up a negative one, then you double up and move up to the next target. Depending on how much you "lost", if you lost say 1%, then I don't see it necessary for you to double up, doing 1.3x might be sufficient, this increases your opportunities in the long run to finally nail it.
Holding for a long period of time is ok for investors who will leave the building satisfied with 10% ROI after the end of the year. I on the other hand look for 5-10% on a monthly basis, big difference
I wouldn't be comfortable with doubling down. I am trying to find what works for me. I find optimal F or Austin's Optimal A may fit my personality much better. There is also Kelly Criterion, but I am sure you know that.
It's hard to use Kelly Criterion on earnings because you don't know the odds. Unless, 50% satisfies you but then again if it was really 50% I would not be using Martingale when playing earnings. I would also like to state that the Martingale system I use and doubling down are two different things. I *do* use scale trading but it's far from doubling down and it is also very important to isolate the fact that I do it using different types of securities, this in my humble opinion is imperative to avoid emotional mistakes.