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Originally Posted by TraderGeek
Here's my take on this . Correct me if I'm wrong.
So what if it busts an account? Firebird for example has been criticized as having 3-4 times a year that it will wipe out an account. The only danger here is if you just leave it going and compounding in the account. My strategy would be to take profits (or at least a healthy portion thereof) out regularly, perhaps even weekly. So when you reach one of those times where it busts the account, so what? You've already taken out profits to equal your initial capital plus a huge return.
Thoughts?
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If you red through 10point3, you must know who I am. AND YES! Thats the idea. Take profit whilst in profit. This is the understanding of all the people who dealt with martingale type EA. What is the problem so far is, when there is profit, it will make you blind. The account balance figure will drive you crazy, insanely! When you see your account doubled, thats because you've compounded it for a certain period, say 20 trading days(1 month), what are you going to do next month? I can guarantee not much people will take out the profit, as everyday they keep telling themself, " No problem, its just another market fast moving day, the MaxTrade can take the move...". Now, you really dont know whether the account will blow up the next day. This is the important catch. Ofcourse, there is another group of unlucky people, the 1st day they plugged the system on the account, immediatelt it went max trade and take them out of business.
I've seen people blow up their account until their wife figured out the next month they cant afford to buy the formula milk powder for their kids anymore. So, if there is a formula to calculate when to take profit, or if there is any formula to calculate when it will blow up the account, then MARTINGALE risk is no longer exist. When its a formula, it can always be predetermine by algorithm. We can directly program it in the EA.
Regards
David