Topic: Martingale strategy With Stop Loss - page 2. (Read 327 times)

I must say I so much appreciate this simple exposé, many might see it as nothing but as an experienced trader, I value it and could go a long way in helping traders trading martingale. However, the martingale strategy is a very risky trading strategy that Can Only work in a strongly trending market condition. No amount of additional strategy, tweak or management can help it so far the trend is not strong, definitive and impactful. An aggressive martingale trader may start with just $200, and if lucky enough, could earn more than $100,000 in 2 days, but the risk is always too high for me. For the record, I've used the strategy to achieve almost $50,000 from a starting capital of $250 in the past, but it was on a demo account.

Nevertheless, I got discouraged because I couldn't replicate it ever since then, though I tried it minimal times. For me, I believe that a separate account is good for martingal strategy and a tight stop loss is not advisable. Your strategy seems to be considering a tight stop loss which will only put the account in trouble pretty fast. The market might be strong and trending upwards, but at times, it might just retrace sharply with about 100 pips, what would the trader do in that sense? The stop loss will be cheaply hit, of course. That is why the best approach is to either use a separate account for it which you know can be lost entirely, but trade it without the use of stop loss. If at all you would use stop loss, you might want to reduce the risk and increase the amount of stop loss use so that the market will not hit it easily.

If that what works for you, good.

But it's not going to be applicable with everyone. While it's a good addition to those that don't know how to stop loss but as soon as you're able to get your own strategy that works for you, fine.

As bitmax said, if it's still possible for you to do some backtest, much better.

It might work for you or not why not do some back testing and try the strategy you have. If you have tradingview paid subscription they would allow you to use the backtesting tool you can use your strategy with their paper money.

Or I think try it on some apps that have live trading with free paper money check this one "Stock Market Simulator Game"

Take note without a technical analysis this would never work because your entry point is random. You would end up losing much than making a profit.

What if you didn't hit your SL on your first or second trade? Anyhow, we've seen how dangerous Martingale System is in gambling, and if you adopt it in crypto trading? Same result. So I guess there will be traders like you who might want to take that risk and try, that even if you win, the profits is still not enough for the cumulative losses that you incurred. But if you insist, then best of luck to your strategy.

When using a Martingale strategy most people dont use SL

Here is a Martingale strategy using SL when scalping

Let me know what you think about the idea

One EXAMPLE

When scalping look for trade setups with a Risk Reward Ratio of at least 2/1

First Trade - If it hits your SL you lose $1
Second Trade - If it hits your SL you lose $1
Third Trade - If it hits your SL you lose $2
Fourth Trade - If it hits your SL you lose $4
Fift Trade - If it hits your SL you lose $8

And so on until you get a trade right with at least 2/1 Risk Reward Ratio

Regards