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Author Topic: Pip Investor - How martingale systems crash  (Read 2889 times)

Offline Berti99

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Pip Investor - How martingale systems crash
« on: February 28, 2014, 03:45:24 PM »
Even martingale systems which are profitable for more than 1 year crash sooner or later:

http://www.myfxbook.com/members/PipInvestor/pip-investor-forex-signal-service/810373

You need very big pockets to survive here, or you are smart enough to know when to give up in a loosing streak.

Offline Josef

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Re: Pip Investor - How martingale systems crash
« Reply #1 on: February 28, 2014, 04:25:40 PM »
I never understood the sense of martingale, averaging and all other "let's wait and pray" strategies. It's of course sad when people blow up their accounts, but if they learn their lesson out of it, it was at least not for nothing.

We become what we consistently do.

Offline Tempestshade

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Re: Pip Investor - How martingale systems crash
« Reply #2 on: February 28, 2014, 04:34:03 PM »
I don't use margrid strategies myself anymore but I don't see how 140% in approx 2 years is a bad thing..... Sure, there was a big loss, but the strategy is still up. As long as it can make more than it loses I consider it a win.

Offline Berti99

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Re: Pip Investor - How martingale systems crash
« Reply #3 on: February 28, 2014, 04:39:09 PM »
I don't use margrid strategies myself anymore but I don't see how 140% in approx 2 years is a bad thing..... Sure, there was a big loss, but the strategy is still up. As long as it can make more than it loses I consider it a win.

I bet nobody started to follow this signal from the beginning.

Offline ultracat

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Re: Pip Investor - How martingale systems crash
« Reply #4 on: February 28, 2014, 05:07:12 PM »
Hmmm what crash?  Martingale crash ususally means margin call.  I see a large loss but this account still made >140% ROI (including the "crash") since Sept. 2012.  This person could stop trading today and withdraw everything and will have still made 140% ROI is ~1.5 years.  That is nowhere anywhere near what I would call a failure.  This person has done as well if not better than most pro hedge funds during the same period. 

Frankly, in terms of the equity curve, this can happen with any strategy.  I've seen plenty of scalpers or really any other type of EA that can sustain serious losses in a short period of time.  To me, this is more "how an EA can crash when you're not monitoring it".  The startegy is not relevant to what happend here IMHO.  Also, there are already dozens of threads about the perils of martingale.  I don't see the need for this one, what new information is here?

To me, this is a good example of panic trading psychology.  Give me this account any day, I'd be happy with it.  Some people like to see their DD as a bunch of individual transactions adding up to a big loss.  Some people can bear to see a big loss all in one basket.  Just a matter of trading psychology.  I try to look at results, and be strategy agnostic.  Who cares how the money was made?  It was made.  Today you can hold that money in your hands if you want.  Tomorrow, maybe not!

Offline Berti99

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Re: Pip Investor - How martingale systems crash
« Reply #5 on: February 28, 2014, 05:21:01 PM »
I think it's a good example what happens if you do not follow a signal from the very beginning.
The signal provider argues you still made 140%. But people who started to follow this system in summer 2013 lost their equity allocated for this signal.

Offline ultracat

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Re: Pip Investor - How martingale systems crash
« Reply #6 on: February 28, 2014, 06:39:45 PM »
Look at the equity curve again, that's not true.   ;)  Anyone who joined prior to Sept. 2013 made money as of today.  People who joined in Sept. 2013 are at break even.  People who joined after Sept. '13 and  before January '13 lost money.  That's less than a 6 month window.  Again, psychology.  If any of those fools pull their money out now they deserve the loss.  WHo trades a system for 5 months then abandons it at a loss?  Martingales go straigt up until they hit a major loss or MC.  Anyone who didn't MC on that move should leave their money in as most likely there will now be a prolonged period of steady gains.  And even if they did, now would be a good time to re-fund and try again.

But I agree, I would never (again LOL) follow a martingale signal or PAMM.  When you run the EA yourself, you are starting the process yourself and you can manage it yourself.  If we were originally talking about the system itself then the person running the system (in this case the signal provider) is doing just fine. 

 

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