Zone Recovery Hedging with Increasing Trade Sizes

Summary

The document describes a high risk recovery approach that opens an opposite trade when price moves against an existing position by a defined pip distance. If price continues in the new direction, the gains on the newer position may eventually offset the earlier loss, allowing both trades to be closed. If price reverses again, another position is added with a size intended to balance the prior trades. The sequence may continue for up to six iterations, with the stated aim of reaching a profitable or break even exit.

Inputs include money or percentage profit targets, a monetary trailing stop, a zone distance, take profit, two moving average periods, and a lot size multiplier. The document offers no performance data or evidence that the method reliably recovers losses. Its outcome depends on price eventually reaching a suitable exit level; repeated hedging and larger position sizes can compound exposure and losses. It also says the system trades using the open candle price and advises trying it on a demo account first.

Key ideas

• The method opens an opposite position after price moves against an existing trade by a specified distance.
• Further reversals prompt additional trades with sizes intended to offset losses across the position sequence.
• The described recovery sequence is limited to six iterations and aims for a profitable or break even exit.
• The document gives settings for targets, trailing stops, zone distance, moving averages, and lot size scaling.
• No backtest results are provided, and repeated hedging can increase risk.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.