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In a message dated 5/27/99 3:09:14 AM US Mountain Standard Time,
dragontoes@xxxxxxxxxxxxx writes:
<< A warning about martingale betting systems: if you don't win strictly
greater than 50% then eventually you're going to be ruined. Gamblers get
around this by quitting before eventually happens. Here's one way to do it:
>>
Your 50% win figure is not true. Even the "simple" martingale systems in
gambling books cross out 2 numbers in the sequence when you win and add only
one when you lose. From that fact alone you can see that you don't have to
win 50% of the time. My martingales don't use this simple method but
nevertheless it is still possible to profit with this simple method with less
than 50% wins. If you were to say that your entry/exit method, without
considering the martingale, must have a positve expectancy (profit) for long
term success which casino gambling doesn't, then I agree. But that is true
with all "non" martingale systems as well.
I defined a martingale system for "trading" as a method of betsizing (
"tradesize") based upon previous wins and loses in that martingale sequence.
Nothing more, nothing less. The types of martingales are limitless and not
confined to the limitations forced upon gamblers because of casino
restrictions and negative expectancy. I have developed successful system
results where every martingale sequence had more losses than wins. If
designed correctly there is no reason why you can't have a minority of wins
just like in single size bet systems. Of course, for best results when %
wins are less than losses, average win size must be greater than average
losses. It sounds as if you think that the average win must be equal to the
average loss. That is only true if YOU decide that is the rule four YOUR
martingale.
BTW, you mentioned terminating the martingale sequence was required to be
successful. That is always an option that I use just like a typical stop
loss when the net loss of the entire sequence is greater than allowed by my
martingale algorthm; however, it is important to have an system that
minimizes termination of the sequence prior to completion. If designed
properly early termination should be rare.
As I said earlier, I expected to get many responses on why martingale systems
will not work because those claiming so are not defining "martingales" as a
method with the flexibilty that I have used. Therefore, I will no longer
make my case to this list. I will refine all of my further "martingale"
discussions privately with those that said that they had also used them
successfully. I don't want to beat this issue to death nor do I have time.
However, I greatly appreciate your response and those of others.
Russ
Russ
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