Tips For Running Forex Recovery Bot Safely
In this guide we will document tips for running Forex Recovery Bot in a safe and effective manner to maximum chance of success.
The most important factor in recovery success is the starting drawdown that the account is in when recovery is started. The higher the drawdown that the account is in when recovery is started, the harder it becomes to recover. Therefore, we suggest starting recovery before the account reaches greater than 30-40% drawdown. The bot can still of course recover drawdown if it's greater than 40%, which we have demonstrated in our YouTube video series - however it just means that there is more risk because there is less margin for the bot to use for recovery trades.
Forex Recovery Bot utilizes a grid style recovery system to generate profit, and recover losing orders. As with any grid style trading system, it is important to keep in mind that the bot can increase it's trading lot sizes overtime. Each time that the bot opens a new trade in the recovery grid it will add a multiplier to it. Therefore, the starting lot size (controlled by "recovery order starting lot size") should be highly considered. We have published an article which covers the starting lot size for different balances here.
It is usually best to start with a conservative lot size. You can always adjust the starting lot size in the future during the recovery process if you wish to.
Additionally, for further details about how the bot operates please visit the guide here.
As covered in the section above; the bot utilizes a grid style trading system. This means that each time a new order is added to the recovery grid the bot will increase it's lot size. For risk management, we have included a setting in the bot called "maximum lot size". This setting can be used to control the maximum largest recovery order that can be used by the bot.
For example, let's say that we have a starting recovery lot size of 0.01 and we set maximum lots to 0.10. This means that the bot will start the recovery trade grid at 0.01 lots. Each time that a new trade is added to the grid it will increase in size until it reaches 0.10 lots. Once our maximum is reached, each time the bot adds a new trade to the grid it will be in the size of 0.10 lots until the grid is closed. It will then start a new grid at 0.01 lots.
As you can see this setting can be pivotal for traders to control their risk or have limited margin in the account.
Inside of the bot recovery settings you will find an input setting called "trend filter". When this setting is enabled the bot will read the current trend of the symbol, and only open recovery orders in the overall direction of price. For example, if the price of the symbol is trending upward, the bot will only open buy recovery orders. This can help reduce the chance of additional drawdown added by the bot - at the expense of a potentially longer recovery time.
The bot includes a news filter, which can be used to pause or close recovery grids before large news events. As you know, large news events can cause sudden and sharp price moment - which has the possibility to add additional drawdown to the account. The news filter can be used as an effort to avoid this from happening.
We strongly recommend that clients test the bot in demo trading or backtesting. The bot has lots of settings, so it is crucial that the trader fully understands how the bot operates before using it on a live account. Each order of the bot comes with three different account licenses, which the trader can change at anytime inside of the client area - so it's very easy to start with a demo account and switch to your live account when you're ready. Additionally, a guide explaining how to backtest the bot can be found by clicking here.
Starting Drawdown
The most important factor in recovery success is the starting drawdown that the account is in when recovery is started. The higher the drawdown that the account is in when recovery is started, the harder it becomes to recover. Therefore, we suggest starting recovery before the account reaches greater than 30-40% drawdown. The bot can still of course recover drawdown if it's greater than 40%, which we have demonstrated in our YouTube video series - however it just means that there is more risk because there is less margin for the bot to use for recovery trades.
Understanding How The Bot Works & Starting Lot Management
Forex Recovery Bot utilizes a grid style recovery system to generate profit, and recover losing orders. As with any grid style trading system, it is important to keep in mind that the bot can increase it's trading lot sizes overtime. Each time that the bot opens a new trade in the recovery grid it will add a multiplier to it. Therefore, the starting lot size (controlled by "recovery order starting lot size") should be highly considered. We have published an article which covers the starting lot size for different balances here.
It is usually best to start with a conservative lot size. You can always adjust the starting lot size in the future during the recovery process if you wish to.
Additionally, for further details about how the bot operates please visit the guide here.
Risk Management - Utilize Max Lots Settings
As covered in the section above; the bot utilizes a grid style trading system. This means that each time a new order is added to the recovery grid the bot will increase it's lot size. For risk management, we have included a setting in the bot called "maximum lot size". This setting can be used to control the maximum largest recovery order that can be used by the bot.
For example, let's say that we have a starting recovery lot size of 0.01 and we set maximum lots to 0.10. This means that the bot will start the recovery trade grid at 0.01 lots. Each time that a new trade is added to the grid it will increase in size until it reaches 0.10 lots. Once our maximum is reached, each time the bot adds a new trade to the grid it will be in the size of 0.10 lots until the grid is closed. It will then start a new grid at 0.01 lots.
As you can see this setting can be pivotal for traders to control their risk or have limited margin in the account.
Risk Management - Trend Filter Mode
Inside of the bot recovery settings you will find an input setting called "trend filter". When this setting is enabled the bot will read the current trend of the symbol, and only open recovery orders in the overall direction of price. For example, if the price of the symbol is trending upward, the bot will only open buy recovery orders. This can help reduce the chance of additional drawdown added by the bot - at the expense of a potentially longer recovery time.
Risk Management - News Filter Settings
The bot includes a news filter, which can be used to pause or close recovery grids before large news events. As you know, large news events can cause sudden and sharp price moment - which has the possibility to add additional drawdown to the account. The news filter can be used as an effort to avoid this from happening.
Use a Demo Account / Backtest Before Going Live
We strongly recommend that clients test the bot in demo trading or backtesting. The bot has lots of settings, so it is crucial that the trader fully understands how the bot operates before using it on a live account. Each order of the bot comes with three different account licenses, which the trader can change at anytime inside of the client area - so it's very easy to start with a demo account and switch to your live account when you're ready. Additionally, a guide explaining how to backtest the bot can be found by clicking here.
Updated on: 25/10/2024
Thank you!