Beren, I beg to differ sir, but the market does have a memory. Every point where the price reversed puts a resistance point at that price level until it has been crossed by a later price movement. The market is made up of traders and we all have memories, mine are fading fast because of my age but they are still there. What I know, the market knows.
Let me pose another scenario, instead of doubling the lot size after every loss, lets try doubling the range size. We can start with 10 pips and if we have a loss, we double the range to 20 pips. As the price continues to move in the wrong direction, the range keeps getting bigger, slowing down the number of trades until the price returns and closes the trade out for a large profit. But just to make it more interesting, lets say that we keep opening the trades, doubling the range sizes but we don't close out the trades until the last one closes for a profit, then all closes at the same time.
The last trade closes where the next to last (and the next draw in size) opened. If the next to last, closes at a zero profit/loss then the extra large profit isn't offsetting a loss so it all goes into your account. Since a martingale is designed to compensate losses then the next to last trade by definition is half of the draw-down. What you have over what you actually lose from the earlier trades ends up being the equivalent amount as if your first trade had closed for a profit every time. By the way, that works for a while but there is a flaw, however, what if you combined a growing but not doubling lot size with a growing but not doubling range size. Starting with 1 lot with a range size of 10 pips, if the price moved one range against us we would have a draw of $100. The next trade needs to be equivalent to $200. By opening the next trade for 1.42 lots with a take profit of 14.2 pips, you get the doubling but the first trade will close for a loss. That is the concept behind the Passive Income Generator. It is a martingale if you know how it is achieved.
Here is a demo that I run to help new traders see how the PI Generator functions.
Passive Income Generator
Notice how small the trade sizes remain, and as a secondary benefit, the growth in the range size slows down the number of trades until all trades are closed at the same time. Click on the history tab, you will see what I mean.
See what I call a martingale is quite a bit evolved from the traditional concept. If you begin with .01 lots, your trade size after 10 iterations is only around .10 or .11 lots and the accumulative value of ten open trades is about 0.55 to 0.60 lots.
And because all trades close at the same time, this generator will work with US brokers, (still better outside the US if you can use a broker outside the US).
Hope this helps. I will be gone for a couple of days but I did want to tell you all how nice it was getting to chatting with you. Intelligent conversation is so refreshing after all the mind numbing stupidity that we get from the world these days. My gratitude.