Shiny Things
Supremacy Member
- Joined
- Dec 13, 2009
- Messages
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Martin-fail
I hate to say "I told you so", but... oh, who am I kidding. This time I am taking a victory lap.
Remember that Forex Envy "FX robot" rubbish that was all over this thread back in June? It started with this:
...then I chimed in with this, and a lot of other people on the thread (notably Agravaine, who made some smart points) came to the same conclusion:
Anyhow, Knight Rider ended up going off in a sulk, complaining that we were being mean and that he really truly had a magic FX robot that pooped dollar bills.
ForexEnvy are nice enough to post their performance on MyFXBook, so we can watch their account balance go up and up and up and up and oooops.
I've taken a snapshot of the account value chart, just in case they try to hide it. This is what it looks like when a martingale blows up, and this is why it's a bad idea to get involved with them:
By the time they blew up, the poor schmucks were short €4.5 million EURUSD and £1.2m GBPUSD on capital of just $80,000; that's a leverage ratio that would make Lehman or Bear proud.
And the best bit? Their original EUR trade was only aiming to make about eighteen dollars. They blew up eighty thousand dollars to make back eighteen dollars.
Idiots.
(Side note: this is also the sort of chart you often see attached to things that call themselves "option selling" strategies and "arbitrage" strategies (like the big daddy Long-Term Capital Management); it's certainly not unique to these silly martingale strategies. These other strategies, though, are sustainable because they control the size of their positions; martingales can't control the size of their positions, and have to keep doubling and doubling until they blow.)
I hate to say "I told you so", but... oh, who am I kidding. This time I am taking a victory lap.
Remember that Forex Envy "FX robot" rubbish that was all over this thread back in June? It started with this:
...then I chimed in with this, and a lot of other people on the thread (notably Agravaine, who made some smart points) came to the same conclusion:
Anyhow, Knight Rider ended up going off in a sulk, complaining that we were being mean and that he really truly had a magic FX robot that pooped dollar bills.
ForexEnvy are nice enough to post their performance on MyFXBook, so we can watch their account balance go up and up and up and up and oooops.
I've taken a snapshot of the account value chart, just in case they try to hide it. This is what it looks like when a martingale blows up, and this is why it's a bad idea to get involved with them:
By the time they blew up, the poor schmucks were short €4.5 million EURUSD and £1.2m GBPUSD on capital of just $80,000; that's a leverage ratio that would make Lehman or Bear proud.
And the best bit? Their original EUR trade was only aiming to make about eighteen dollars. They blew up eighty thousand dollars to make back eighteen dollars.
Idiots.
(Side note: this is also the sort of chart you often see attached to things that call themselves "option selling" strategies and "arbitrage" strategies (like the big daddy Long-Term Capital Management); it's certainly not unique to these silly martingale strategies. These other strategies, though, are sustainable because they control the size of their positions; martingales can't control the size of their positions, and have to keep doubling and doubling until they blow.)
