Why do we create a Martingale EA?
Serial: Yoko and Kenji’s GOLD EA Mastery Log, Part 2
Hello, this is Yoko.
Thank you to everyone who read Part 1. As promised, this time we’ll talk a little about the roots of it all.
Averaging Down is Scary
First, I’ll be honest. Averaging down is a scary mechanism.
Averaging down is a method of adding to a position that has unrealized losses, to move the average entry price in a favorable direction. If the market comes back, you can end up with profits overall. It tends to have a high win rate and a asset curve that rises more cleanly to the right.
But behind the scenesyou’re deferring lossesas the market doesn’t revert and instead keeps moving in one direction, the accumulated positions can cause a large loss that shakes the entire account. As the saying goes, “slow and steady gains, but catastrophic losses lurk in the tail”—the danger of averaging down concentrates in the unseen tail ends.
Kenji always says,“Backtests of averaging down should be viewed by the toughest moment, not the prettiest right-shoulder up.”
In practice, some settings have broken
This is behind-the-scenes development.
During the development of Rising Tide, we tried many aggressive settings that could yield even more profit. For a while, the assets grew astonishingly. Then,as gold suddenly plunged in March 2026, all aggressive settings collapsed the account.
No matter how good the mid-term results were, if a single steep drop wipes out the account, it’s meaningless. We discontinued those settings from productization.
The settings we’re delivering now are those that survived 12 years, including the plunge in 2026.Only those that enduredare included. The numbers may seem modest, but this is the answer we arrived at.
Still, why choose Averaging Down
So why take Averaging Down at all if it’s so scary? There are three reasons.
① Because it suits the nature of gold as a market
Gold tends to rise over the long term. In the short term, it is prone to rebound after large selloffs. The idea of “buying the dips and waiting for a retrace” fits well with gold’s nature. Averaging down isn’t suitable for all currency pairs;you must choose the marketas the first step.
② Because the fear can be reduced through design
You can’t eliminate the fear entirely, but you can reduce it. Our EA includes crafted safeguards, such as the following.
| Widen averaging down intervals according to market volatility (ATR) When markets are turbulent, you spread out the intervals and pick more cautiously. |
| Do not take new positions when there is a sharp rise or fall When prices move sharply in a short time, wait for the market to settle instead of taking new positions. Averaging down is most dangerous when you keep buying into a strong one-way move. |
| Do not start in risky times or on risky days For example, around major economic indicators. |
| Have a final brake If unrealized losses exceed a set amount, the system stops to protect the account. |
③ Because you can verify scary scenarios repeatedly through testing
We base our approach on 12 years of backtesting, including the COVID crisis volatility and the March 2026 plunge.
Seeing the scary moments many times with pretend money before risking real money is our rule for dealing with averaging down.
Why We Choose “Conservative Leverage”
Averaging down involves an important number called “leverage multiplier.” It determines how many times the lot size increases with each step.
If you raise the multiplier, you can make large profits from even a small market rebound. It’s common in the industry to show flashy results with high multipliers in free gold EAs shared online. It’s a well-known approach.
However, when you lay it out, you see this: starting with initial lot 0.01 and averaging down up to 20 steps.
| Averaging-down Multiplier | 20th Step Lot | Total Lots at 20 Steps |
|---|---|---|
| 1.0x (even) | 0.01 | 0.20 |
| 1.06x | 0.03 | 0.37 |
| 1.1x | 0.06 | 0.57 |
| 1.3x | 1.46 | 6.30 |
| 1.5x | 22.17 | 66.49 |
| 2.0x | 5,242.88 | 10,485.75 |
The gold row shows the multipliers we currently use as our standard.
With a 1.5x multiplier, the 20th step lot becomes over 2,000 times larger than the initial. After this buildup, a small reversal is not enough to sustain the account.
We intentionallyset a conservative defaultfor the multiplier.
| Alchemy Rising Tide | 1.1x |
| Alchemy Flexible(Stability) | 1.06x |
| Alchemy Duo | Even(No increase in lot) |
Even at the same 20-step averaging down, with 1.1x, the 20th step lot is about six times the initial, and the total only reaches 0.57 lots. With Duo, it stays the same initial lot size regardless of steps.
When the market returns, the profits are not as flashy as high-multiplier EAs. Instead, our EA has two strengths.
Strength 1: Surviving longer
Even during reversals, the account can sustain longer. We measure success by surviving 12 years including the 2026 plunge.
Strength 2: Operable with low leverage
High-multiplier averaging down usually assumes ultra-high leverage overseas accounts. With such scale, you need substantial margin; otherwise you won’t endure.
Our three products, with default settings,have run 12 years on a 20x leverage account without a single forced stop-out.
| EA (Default Settings) | Minimum Equity Maintenance Ratio (Leverage 20x) |
|---|---|
| Alchemy Rising Tide | 50.76% |
| Alchemy Flexible (Stable) | 20.13% |
| Alchemy Duo M15 Mode | 196.33% |
| Alchemy Duo M5 Mode | 20.50% |
However, how far the maintenance ratio can drop at the most challenging moments depends on the EA and mode. Some domestic brokers will trigger a margin-call/stop-out at 100% or 50%If you use a low-leverage account, check your broker’s stop-out threshold and ensure you have extra funds, or, if using Duo, choose the M15 mode with more maintenance margin room.
Surviving 12 years is more important than quick profits.
And it is possible to operate without relying on high-leverage accounts.
This is the core feature of our Gold Averaging Down.
Also, for those who want to pursue higher profits, Alchemy Flexible includes aggressive and ultra-aggressive settings with higher multipliers. However, these are options, intended for high-leverage accounts only.Default is the Stable setting at 1.06x. We’ll explain this difference in detail in the next parts.
The final brake is the fund management of the user
One more important point.
No matter how much the EA is designed, the safety of averaging down ultimately depends on thebalance between the account funds and the lot sizes. Even the same EA can break easily if you run it with larger lots than advised compared to your funds.
That’s why on our product pages and manuals we show not only good numbers but also the most challenging moments’ numbers, so you can judge whether your funds can withstand them.
For those who still find Averaging Down not suitable
If you’ve read this far and feel you still cannot like averaging down, that’s perfectly healthy.
For such people, we also offer“The Golden Guardian”which does not use averaging downWe’ll discuss this character in detail at the end of the series.
Next Episode Preview
From next time, we’ll discussthe differences in the three Alchemy series’ characterEven among averaging-down types, Rising Tide, Duo, and Alchemy Flexible differ significantly in philosophy and suitability.
Thank you for reading until the end.
Yoko
※This article presents historical testing results and does not guarantee future profits. Investment decisions are the reader’s own responsibility.