Using Martingale Wisely
Submitted by User on October 14, 2009 - 15:35.
Submitted by Dachel Miqueli
Ok here we go.
I traded the GBP/USD only, now wait around 12:45am EST to find out that in the past few hours the price has consolidated, then open up the 5 min time frame and 30 or more if you want to.
This is only to find the recent Support and Resistance to have an idea of where the market should react. Why that specific time you may ask.....well I've been watching the market for a long time and realize that most of the short trends or strong movements happens after this hour so is a good time to start. If at this time the price is near a support or a resistance I recommend to wait for the price to reach it and then sell if it touch a resistance and buy if it touch the support. If the price is too far away the enter buying or selling around that time.
I know you still have questions but that was all regarding entry. I will keep explaining but I need you to understand what we are looking forward to do here.
Were are going to use martingale wisely for the very first time. So the thing is that around this time a lot of big movements takes place, another good hour is 2:00am EST, 3:00am and 4:30am, where 3:00am is not so strong. So as we both know if we use martingale and the price start bouncing we will lose money. But this times are great due to almost always the price go straight up or down, I really don't care where, they move enough to exit in break even or just to leave them run in order to have more profits. This is the idea behind the method. The more it bounces the more money you will get per pip so if it goes 20 pips on your favor then put it on Break even and let it run for maximum profit.
Now Money management.
You have to set up first you risk % per trade. This % should be the loose of the complete sequence ok? For example, if you have $1000 and you want to risk 2.7% which is $27, at the end that's the total amount that you are going to loose if you loose the hole sequence. That will keep the system safe. The sequence is up to 5. If you enter for the fifth time and the price go against you then you loose the whole sequence. the gaps are 10 pips.
The calculations of the starting lots shouldn't be a problem for you but I have an Excel file that calculate it for me so let me know if you want it.
Let me know if you got it right ok?
I have made 51 trade so far and have lose only 3 witch make this method a 94% winner so far.
Take care and good luck