Articles on: Settings & Usage

How Forex Recovery Bot Works

Forex Recovery Bot is an automated trading utility for MT4/MT5 platforms that helps traders manage and recover from losing positions. Through systematic hedging and algorithmic position management, it works to minimize drawdown and restore account balance.

We will cover the three step approach that Forex Recovery Bot takes in the guide below:

Core Recovery Process:



Step 1. Position Hedging

When activated, the bot's first action is to hedge the volume of losing positions. This creates a protective counter-position that effectively locks the current drawdown, preventing further losses on the original trade.



For example, if there's a losing EUR/USD buy position of 0.05 lots, the bot automatically opens a 0.05 lot sell position on EUR/USD.

Step 2. Recovery Orders

After establishing the hedge, the bot initiates recovery positions using one of two algorithmic approaches:

Grid Recovery: Implements a systematic grid-based position building strategy, optimized for ranging markets or periods of lower volatility.

Zone Recovery: Deploys strategic stop orders for position building, particularly effective in trending market conditions.


Step 3: Smart Position Recovery

The bot leverages proprietary order fragmentation technology to break down positions into optimal smaller pieces. For example, it can systematically resolve a 0.05 lot position in precise 0.01 lot increments.

When profit targets are met, the bot's automated closure protocol:

Exits recovery positions
Resolves hedge portions
Closes segmented parts of the losing position
Banks incremental profits



As demonstrated in the image above, the bot closed a group of sell recovery orders, together with part of the hedge, and original losing order for a profit of $1.46. The bot will now restart the process and continue closing smaller parts of the losing order until it is recovered.

Updated on: 24/12/2024

Was this article helpful?

Share your feedback

Cancel

Thank you!