SMARTY - Smart Martingale

Hi,

It is mathematically impossible to “recoup” forever, sooner or later, at some point in time, a long, very long series of losing trades will surely eat all of the profits your system had been able to accumulate up to that point (and probably your starting capital as well), no?
Sorry if I am missing something.

True but my current performance points to a non-zero but very low risk-of-ruin. I expect this VERY low figure to rise but how much? And how much profit would be extracted before that point?

Your post says : “This will require 63 consecutive losing trades”.

Yes, but the risk of ruin does not even need 63 CONSECUTIVE losing trades, ANY long, very very long series of losing trades could achieve the same result, even if the losing trades are not consecutive (death by a thousand cuts).

That’s an excellent point.

If your system can somehow quit when it reaches its “optimal” profit (from your backtest) then you can indeed beat the system.

True ANYTHING can happen since I’m trading the unknown so its just a probability game and I think I’ve stacked the odds in my favor as best I can trading unpredictable markets. My back and forward testing supports a net profitable system and at this point I’m almost 20% of the way to proving it. I wouldnt be trading a system that I didnt believe that I wouldn’t be able to at least extract my principle and then further net profits.

NOTE: I keep saying I want to reprogram this system in Python but Good Grief its gonna be harder, more expensive and cumbersome to duplicate the accuracy of MT5 for Forex. Being able to backtest with per tick data with the actual embedded spread is a game-changer. Its REAL what-you-see-is-what-you-get for finance forecasting. Amazing Tool!

In the past I’ve programmed for max upside. Focusing on limiting downside risk as much as possible while still generating profitable returns has so far insulated me from the worst of the market even while trading some of the most volatile currencies. So far all systems are working as designed. For any doubters the only believable proof is track record so stay tuned…

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Be careful, those “in-house” backtest software can see the actual logic of your system, and compete against you (if they notice that your strategy is very profitable), unless your system can send buy/sell signals directly from your own server, via their API.

But this requires more computer programming expertise and skills, of course.

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Merry Xmas!! Threw in the towel for 2024. Was only going to trade on Thursday then let any running trades close. Got a decent surprise when my open USDJPY trade closed profitably so I just exited the next trade at breakeven and paused the algo. I’ll resume trading Jan 2nd, 2025. Also, looks like I got my Darwin gift and will close 2024 Dec in the GREEN barely (in any event its good for another 30K + current 60K allocation).

Up/Down, Up/Down, Up/Down. SMARTY - Smart Martingale basically just crept along for the month. Went into a ‘pinching’ drawdown and started to climb out of it. It was pretty Meh even though Jan. should have been OK to about a 2%+ upside. The month started out on the downside for GBPUSD. It never really found its footing and mostly whipsawed. One news trade blew through the SL and gave me a loss for 2X normal ($1308). Ughhh… A gut punch but I’ve earned at least 3X that in ‘positive’ slippage.

BAD NEWS/GOOD NEWS: Bad - Ended the month with a slight <1% loss that DIDNT HAVE TO HAPPEN. Good - I know what happened: Mid Jan GBPUSD traded choppy and my system only had a few opportunities to exit the trade before the spike. BOTH exits were blocked by my News -Filter. Luckily I’m always running a ‘What-If’ version on my desktop with slightly different settings and saw the exits that were missed and the spike I would have missed completely. Oooof…

I adjusted the settings and BINGO the recovery began. GBPUSD has seen little action since going into DD so I expect it to redeem itself before the full smarty sequence ends but for now slight DD. I forecast Jan to be weak and only good for a couple percent since the new year always starts slow.

On my Darwin its ‘Mid’ performance earned me another 30K allocation mostly thanks to my previous months performance. The new 30K replaces my Nov 3-month allocation that falls off (90K active). So basically a ‘reset’ for Feb. with an improved algo. It was actually encouraging watching the algo fight back and ‘almost’ refuse to lose for the month from digging out of a near -3% hole. Feb should return the algo to proper positive form.