Thread: Double or Nothing Scaling

Edit: Just realised that this is the Martingale Strategy

Hello I am searching for any criticism, and also methods of execution.

Forex is 2 dimensional, price is just 1 dimensional. Price can just go up or down. Suppose that the market is arbitrary, suppose it's not. We can agree that price has a probability of going X pips either way.

So, the egy. Suppose you trade a egy where's price breaks a certain level upwards or downwards there's a 50% probability of succeeding. So if you win you win. You lose Should you lose. Now assume if you lose, you hedge that loss, and trade the day with double the leverage, and so forth and so forth before a victory is achieved. In the long run the yield is small compared to the leverage used but the declines are hedged. There's 0.0009765625% likelihood of failing 10 times in a row using a 50% winrate. So if you trade small enough to be able to manage 10 losses you will be able to always make money without risk of going bankrupt, provided that the percentage is close to 0.

What are your thoughts, I want to discuss theories about the best way best to implement this egy avoiding as much risk as you can.

Regards.

Originally Posted by ;

quote My point was not about the spread. Most traders forgot the RR into the profitability equation. Winrate alone is not enough to say a egy is profitable. In my case of 99% winrate, if the remaining 1 percent is a reduction larger than the preceding 99% profit, the final result is a reduction... despite the 99% winrate... not even taking into account the spread.

Yeah true, mine was just an example that should be Simple to follow

With reference to this 90 percent winrate, I was talking about Gann who is a trader, so ofc that would be the best of their best. And in terms of the RR, ofcourse I am not referencing to those 1 pip win 10 pip stoplosses. Nor do I have a 90 percent winrate, I wondered if employing martingale to an extremely large winning egy with suppose 1:1 R:R is sensible.

Eg, suppose witha 90 percent winrate, 1:1 risk, and you also take 20 transactions, maximum 2 transactions dropped, so you may aswell martingale away the losses right because the maximum losses you might have a row if the probability is constant is 2. Etc etc

Originally Posted by ;

With reference to this 90 percent winrate, I was talking about Gann who's a legendary trader, therefore ofc that would be the best of the best. And in terms of the RR, ofcourse I am not referencing to those 1 pip win 10 pip stoplosses. Nor do I have a 90 percent winrate, I was wondering if applying martingale to a very high winning egy with assume 1:1 Ris sensible. Eg, assume witha 90% winrate, 1:1 risk, and you also take 20 trades, maximum 2 trades dropped, so you may aswell martingale away the losses right since the losses you might have...

Lets cut to the chase Martingale is never a good idea.