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Old 02-24-2007, 08:37 AM
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Modified Martingale

ive been trying to put a spread sheet together so i try variations of the martingale system, however im struggling with the maths of it . i want the basic martingale system showing break even points, with the ability to input current prices and my investment for each price. eg, if i invest £100 at a price of £2 and another £100 at a price £1.5 where is my break even? what if i invested £200 at a price of £1.5 instead of £100, what if my next investment was £50 at £1.3?

i thought it was the average of the price, but if i invest £100 at a price of £100 i will get 1 unit, then if i invest £100 at a price of £50 i will get 2 units, so even though ive doubled down will the breakeven still be the price average (at £75) because i now have more units at a lower price thus breakeven should be reached earlier (round about £66 imo). thanks in adavnce.
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Old 02-24-2007, 11:53 PM
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Quote:
Originally Posted by trevman
ive been trying to put a spread sheet together so i try variations of the martingale system, however im struggling with the maths of it . i want the basic martingale system showing break even points, with the ability to input current prices and my investment for each price. eg, if i invest £100 at a price of £2 and another £100 at a price £1.5 where is my break even? what if i invested £200 at a price of £1.5 instead of £100, what if my next investment was £50 at £1.3?

i thought it was the average of the price, but if i invest £100 at a price of £100 i will get 1 unit, then if i invest £100 at a price of £50 i will get 2 units, so even though ive doubled down will the breakeven still be the price average (at £75) because i now have more units at a lower price thus breakeven should be reached earlier (round about £66 imo). thanks in adavnce.
??? dont understand
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Old 02-25-2007, 08:33 AM
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ok maybe forex numbers may make it easier to udnerstand. basic martingale is double down on every loss,

price......buy
1.9000 - 1lot
1.8500 - 1lot
breakeven = 1.8750
but what happens if i buy 2lots at 1.8500, where will my breakeven be then?

price......buy
1.9000 - 1lot
1.8500 - 1lot
1.8000 - 1lot
breakeven = 1.8500
but what happens if i buy 5lots at 1.8500 and then 3lots at 1.8000, where will my breakeven be then?
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Old 02-25-2007, 01:39 PM
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Hello trevman

Try this:

your 1.example ((100 * 2) + (100 * 1.5)) / (100 + 100) = 1.75
the 2. ((200 * 1.5) + (50 * 1.3)) / (200 + 50) = 1.46
and the 3. ((100 * 100) + (100 * 50)) / (100 + 100) = 75

for the 3. it is not 66 because otherwise 100-(100-66) had to be 50.

and by having more stakes : ((price*inv)+(price*inv)+(price*inv)) / (inv+inv+inv)
and so on.

Yes, its always a little bit tricky with the math.Your 66 had brought me initially to calc the so called Harmonic Mean http://mathworld.wolfram.com/HarmonicMean.html but had led me on a wrong track. For hours...damned.
Btw maybe later on you want to check out also the Supermartingale with your
spreadsheet calcs.I would be curious to see the outcomes.


hbud

Last edited by hbud; 02-25-2007 at 07:01 PM.
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Old 03-03-2007, 11:40 AM
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hbud, ive been testing the suggested formula and ive noticed abit of an oddity. the distance between the price of trades and the price of breakeven seems to go up before it goes down like so

Code:
BREAK EVEN			DIFF
8033				0
6024.75				2008.25
4685.91666666667		2677.66666666667
3765.46875			2761.34375
3112.7875			2610.725
2635.828125			2384.796875
2277.21205357143		2151.69642857143
2000.4052734375			1937.6474609375
1781.62456597222		1750.24565972222
1605.0310546875			1589.3416015625
1459.83229758523		1451.98757102273
1338.50646972656		1334.58410644531
1235.69529371995		1233.73411207933
1147.50138636998		1146.52079554967
1071.03398030599		1070.54368489583
diff = breakeven - price at last trade

surely it should go down from the start, rather than up. the forumlas are all correct.
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Last edited by trevman; 03-03-2007 at 11:42 AM.
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