[AgeKay]

Originally Posted by Trvlwanderer »

I still chuckle when I see martingale in action at casinos with roulette. The odds do not change each turn!

I actually tried that once in a casino. I was betting on 'red' and it took 16 'black's in a row to blow me out. It actually kept going until there were 21 'black's in a row. I just thought to my self: What the... Anyway, I learned the lesson to never double up again.

It's the same when it comes to trading. You might backtest your strategy 10 years but then comes on day you have never seen before and you lose everything. So I would avoid it if you want to do this long term.

I have thought a lot about position sizing and also done a lot of analysis on it and came to the conclusion that a big variance in your position size will have a negative effect on your results (due to the unpredictability of your trading results). You don't need varying position size to trade profitably. Sure after you are comfortable with your trading strategy then you might want to tweak it a bit.

Regarding Tharp, as far as I know, he is still not trading professionally, he makes his money by selling his "trading education" and coaching (he does coach big professional traders, but he does not teach them how to trade, he helps them with their psychology)...

[SwingTradinJay]

Originally Posted by notouch »

Nick Leeson traded using Martingale money management and look what happened to him. I strongly recommend watching the movie Rogue Trader if you're not aware of all the facts.

Lol, good movie indeed! Let go of those losing positions.

But, at least he was able to write a book about about evading police, going to jail, and getting cancer...Doesn't sound like a fun life!
Typical trader trying to milk a few U$D out of the situation lol.