I have also coded a few correllated EA's but they were nothing special as I just do not understand the subelties of correllated pairs well enough to really exploit it.

As for the martingaling, I have a martingaler running on demo for ages that still hasn't blown an account (though it has come close! ), and that is always in the market, so it doesn't use a trigger (see pic). It not 'blind' martingaling though... So, the minute the dual-pair martingaler runs, it would immediately open orders for both pairs. When one closes out in profit, a new order would immediately be placed, and of the same trade type that were just closed. As both pairs will always have different order types, there will always be a hedging aspect in play. And when they start moving in the same direction as ocasionally happens, one side will be trading with price direction, so will be closing out winning trades on each 'step', until the move back into anti-correlation-mode, when 'normal' martingaling would resume...

It works in my head, but that's not saying much!

Hi omelette,
The idea of corrolation is to find a pair that move along like EURUSD and USDCHF

so if we SELL EURUSD that means we sold EUR and we bought USD
and if we Bought USDCHF that means we bought USD and Sold CHF

in away we have bought USD in the first trade and sold USD in the second trade thats corrolated trade but we can only call it corrolated trade as the EURUSD and USDCHF move are tight together

so lets say we have designed a corrolated expert to be a martingle , whats the plan to close the trades on EURUSD and USDCHF once the equity has reached a % , if thats the case then we don't need martingle

the other case if we close one side when it reach a certain % , while the other side has already a martingle trade , that means once the trades in profit are closed , we are left we big DD orders , and that would put the account close to margin call if the martingle has reached advanced levels ... so I am not quite clear about the corrolation martingle yet !!!

There might be away around this , but I am not aware of it.

the corrolated expert that I have designed is a scalping expert and it trades EURUSD , but once the account reach certain level of draw down , it doesn't open a martingle trade instead it open a corrolated trade ... now this trade can be open for a while and will close when the profit is %1 of the account , however there is hidden SL just in case the pairs went out of corrolatoin

__________________
“Risk comes from not knowing what you're doing”
“Be fearful when others are greedy and greedy when others are fearful” Warren Buffett

I understand the mechanics of correlation, (and most certainly forex 101) it's just that I could not produce a profitable EA using it! In theory, correlation would seem to have a lot of potential, but I have yet to find any long-term profitable EA that uses it - not saying they don't exist, just that there are none freely available. And like I said, my attempts to exploit it have not been very successful...

Now that I stop and think about it - opening martingalers on separate charts of say EURUSD/USDCHF, would roughly achieve the same thing - which is not very much! So yes, I think you are correct...

btw your mention of the scalper reminded my of my experience with Aleccohfx - they had a scalper that did exactly as you describe on my managed account - looking for 7 pips on EURCHF, that opening an additional EURUSD position when it decided it had guessed incorrectly - below is the equity curve! I wasn't impressed...

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Exploiting a correlation requires more than just a single part.

To be profitable, you need to find the right pair to exploit by understanding the fundamental economics relationships. With that knowledge, then you have to use the correlation to make money.

This is one of the advantage that forex actually provide, and should be fully exploited to be successful or at least put some coffee money in your account.

I never really thought about using martingale with correlation, I think it might work well. But I wouldn't use martingale in the traditional sense. I would use a cost averaging system with a hard stop. Still, not sure if that would actually add to profitability since martingale is more effective when you are wrong...at first at least.

hey mini-me,

thanks for the email, i'll be posting my thoughts on beating the martingale and grids tommorow night using the tools i mentioned a few posts ago....phreak

well, i've been watching this thread for a while and with all due respect to everyone here i think most have it all wrong...let me explain:

1- if your going to be running a martingale or grid system the timeframe in your charting is essential....you must use a 1 minute timeframe, PERIOD...anything longer than that and your asking for trouble if there is a dramatic move that happens in a minute or 2......

2- do not run the martingale system on NFP days or on the weekends, why?? because the market easily could gap against your martingale system, especially after the weekend on the start of a new session...its not a question of IF but WHEN...

3- ok, you have to use the highest number of sequences to get the most protection, for example, on a 10 pip stop and 20 pip take profit here would be the sequence:
.01
.02
.03
.04
.06
.1
.15
.23
.35
.54
.82
1.23
1.85
2.8
4.2
6.3

using phantom trades is NOT enough, myself and another forum member did this EA months ago with phantom trades and its ok but there is another piece of the puzzle you have to fill in...

4- now to the meat portion.......every indicator on this forum that your using for your martingales and grids are SHIT.....thats right you heard me correctly, SHIT...so now you might be asking, phreak what do we use instead?? good question, in order to construct this method properly your going to have to get a little more advanced than the shit indicators that are here, for example.....

-you must first have properly scaled charts, Why?? because you are going to use 3 geometric ellipses on your charts, ellipses are about 95% accurate on forex charts when used properly, now, when there is an ellipse failure, thats ok, because are sequence is high enough that the EA can recover with relative ease....it doesnt end here...

5-using the planets Declination we can plot it into the future infinately, so that means with 60-80% percent it can accurately predict where the market is going to go....

6- planetary syncs are about 97% percent accurate with the forex market, of course you will need access to the ephemeris wheel, which is pretty easy...

7- when you combine all these powerful tools together and there is a "failure" in them 5% of the time, thats ok, because again, our sequence is so deep enough that it can recover with much ease...


using the sequence above with 3 phantom trades included initially, my martingale system which includes all of the above tools and scaled charts has not gone over .06 lots in 3 months of trading using the gbp/usd and the eur/jpy pairs.....coooool......continuing the testing though.......

and the results are just as good with the grid, although im still in testing.....

let me know your thoughts mini-me....

Hi phorex_phreak,

every comment is valid and every opinion is respected , the only way to tell right from wrong are tests.

What I have learn is to always keep a good margin to play with, presonally to keep my margin, I hedge my losses and I add to my wins but thats another subject.

time frame for martingles doesn't really matter , unless we use indicators , if you notice from my previous notes I don't use indicators to entre the trade " I use them to confirm the trend and mostly trade against it " , to enter the trade I measure the move and how big it was and I enter a reversal if its too big , there are many way to make money in forex, some ppls use pullback to add lots and enter with the main trend , other ppls use pullback to make small profit, keep in mind that the market is mostly choppy so we see lots of pullbacks.

- Not running a martingle during NFP is a valid point
- I have seen lots of good work in TSD so I may not agree with you on that point, but I agree that the best work is done privately
- trying to forcast the forex is done by techinical trading , I am not aware of any indicator that would simulate a trader techinical view on the market, planetary syncs maybe very good but I haven't tried them, what I would do is instead of forcasting the future you could start the trade at the London open or NY open and follow the trend from there , that would be easier ..

I am not against your ideas, you could be 100% right, the only way to know it , is to test it

Regards,
Alan

__________________
“Risk comes from not knowing what you're doing”
“Be fearful when others are greedy and greedy when others are fearful” Warren Buffett

Hello,

I just wanted to add something ... I have read thousands of posts about martingale both in forex and in roulette. From my experience martingale strategy by itself is doomed to drive people crazy (and of course broke)... I emphasize on the worlds BY ITSELF.

Let's start from roulette....What do most people think ... I will bet on red, and will double my bet every time I lose, but eventually everyone gets hit by a 9,10 or 11 in a row and hit the limit on the betting table... Why people think they will win but they lose ? It is actually very simple math ...

1st of all your chances are never 50/50 ... the most stupid ones ignore the ZERO, or the double zero - so the chances of winning are about 47% against 53% chances of losing.
2nd - everyone thinks that after getting 5 black ones in a row it is very unlikely that they get a 6th one and the chances are very slim ... oh gee.. you really have to be an idiot to believe that because these are independent events and chances are always the same - 47% like the 5 previous times...


... so what is the conclusion ? Roulette cannot be beaten unless you are luckiest person in the world Good to know martingale doesn't work on that ... but the thing that we need to think again is .. IS forex a roulette or NOT?
I hope the answer is no ... what do indicators give you in trading? They give you an EDGE - the improve your chances ... you start with a 50/50 chances to come up with the correct direction - buy or sell, but either your indicators, your fundamental analysis or your pure intuition give you an edge - maybe 1% but that means you have 51% chances of winning.

The conclusion is that pure martingale is doomed - due to te restrictions (limited amount of money) but combined with the specifics of forex it can be winning. Let's take an average system that gives 5 out of 10 winning trades - it breaks even if followed correctly. So use martingale on it - you lose 5 times on the average and the 6th is correct... Am I wrong?

... just brainstorming ...

There was a very interesting article on a website I read a week ago, but I am still new and not very familiar with forum rules so don't want to get in trouble - not sure if I can post the article or a link ? any idea?

Regards!

There is more than 1 way to trade Forex and make money. So there is no right or wrong way, just profitable or not. 5% risk of ruin may be OK with some, and not with others. And carrying large drawdowns for long periods of time after an exceptional event might also be acceptable for some or not for others.

I personally would not use full martingale in my own trading. I'm more interested in martingale when I'm right, and get out when I'm wrong with a stop. That is my interest. To build out a martingale as the trade is going in my direction, not the other way around.

I must agree with you, martingale cannot be used as a trading system - it might cover up losses or increase profits though if used right... which actually is the catch!