Recovery System
Understand the recovery system for managing losing positions. Learn how to recover from drawdowns and minimize losses.
Learn how to recover from losing trades by automatically adding positions at better price levels.
Introduction
The Recovery System is an advanced feature that automatically adds positions to losing trades when price moves against you. By opening additional trades in the same direction at better prices, the system reduces your average entry price and helps you achieve profitability even when your initial trade doesn't perform as expected.
Important Notice
Recovery trading significantly increases your position size and market exposure. Each recovery trade is larger than the previous one, which can lead to substantial losses if the market continues moving against you. This feature is only recommended for experienced traders who understand position sizing and risk management.
Prerequisites
Before using recovery, ensure you understand how averaging down works, have tested the feature on demo accounts, and never risk more than you can afford to lose. Always start with minimum position sizes when first testing recovery.
Core Concepts
Averaging Down Strategy
When your trade moves against you, recovery automatically opens additional positions at better prices to lower your overall entry point.
Progressive Position Sizing
Each recovery trade uses a larger position size than the previous one, helping you reach profitability faster when the market eventually turns.
Unified Exit Management
All recovery trades are managed together with a single profit target calculated from your improved average entry price.
Key Benefits:
Improved Entry Price
Recovery trades at better levels reduce your average cost basis.
Faster Recovery
Larger position sizes help you reach profit with smaller market retracements.
Automated Management
The EA handles timing, sizing, and exit management without manual intervention.
Flexible Control
You control maximum number of recovery trades and spacing between levels.
Activation and Setup
Recovery can be activated in two ways: globally through the EA settings or selectively through signal parameters. This flexibility allows you to apply recovery to all trades or only to specific opportunities that you identify.
| Mode | Description | How to Use |
|---|---|---|
| Disabled | Feature completely disabled (default) | No recovery trades will be placed |
| Enabled | Always active using EA settings | All trades will use recovery when conditions are met |
| Signal | Activated only by signal parameter | Add re parameter to signals that should use recovery |
Signal Control Example: To enable recovery for a specific trade, add the re parameter to your signal. The fastest way is the Syntax Generator — toggle Recovery in the Advanced Features section and the re flag is added to every generated signal automatically.
If you do build the signal by hand, the format is:
LicenseID,EURUSD,buy,risk=0.01,sl=50,tp=100,comment=MyStrategy,reWhen recovery is enabled globally (Enabled mode), it applies to ALL trades. When using Signal mode, only trades with the re parameter will use recovery, giving you precise control over which trades get this feature.
Recovery Management
The Recovery Management section contains seven settings that control how the recovery system operates. Understanding these settings helps you customize the system to match your risk tolerance and trading strategy.
| Setting | What It Does | Recommended Values |
|---|---|---|
| Recovery Management | Controls when recovery is active | Disabled (safe) / Enabled (all trades) / Signal (selective) |
| Volume Calculation | How profit target is calculated | Initial Volume (simpler) / Average Volume (balanced) |
| Maximum Trades | Limits total recovery trades per position | 1-3 for beginners, 2-5 for experienced traders |
| Initial Distance | Pips to wait before first recovery trade | 20-30 pips for scalping, 40-60 pips for swing trading |
| Distance Multiplier | How much farther each recovery trade is placed | 1.0 (equal spacing) to 2.0 (increasing spacing) |
| Lot Multiplier | How much larger each recovery trade becomes | 1.5-2.0 for moderate risk, 2.0-3.0 for aggressive |
| Recovery Target | Profit target in pips for all trades combined | 5-15 pips for quick exits, 20-50 pips for larger gains |
How Recovery Activation Works
Understanding when recovery trades are placed helps you set appropriate parameters:
- Initial Trade Placed. Your original trade is opened based on your signal or strategy.
- Price Moves Against You. Market price moves in the opposite direction to your trade.
- Distance Threshold Reached. When price moves beyond your Initial Distance setting, recovery activates.
- First Recovery Trade. EA opens a larger position in the same direction at the current (better) price.
- Additional Recoveries. If price continues against you, more recovery trades are placed at increasing distances.
- Unified Exit. All trades close together when the combined position reaches your profit target.
Key Point: Recovery trades are always placed in the same direction as your original trade. If you bought EURUSD and it drops, recovery will buy more at lower prices to improve your average.
Understanding Position Size Growth
The lot multiplier determines how much larger each recovery trade becomes. Here are common scenarios:
| Original Trade | Lot Multiplier | Recovery Sizes | Total Exposure |
|---|---|---|---|
| 0.10 lots | 1.5x | 0.15, 0.23, 0.34 lots | 0.82 lots (8.2x bigger) |
| 0.10 lots | 2.0x | 0.20, 0.40, 0.80 lots | 1.50 lots (15x bigger) |
| 0.10 lots | 2.5x | 0.25, 0.63, 1.56 lots | 2.54 lots (25x bigger) |
Critical Warning
Position sizes grow exponentially with each recovery trade. With a 2.0 lot multiplier and 3 recovery trades, your final position will be 15 times larger than your initial trade. Always calculate your maximum possible exposure before enabling recovery.
Profit Target Calculation Methods
The Volume Calculation setting affects how your profit target is calculated:
| Method | How It Works | Best For |
|---|---|---|
| Initial Volume | Target based only on your first trade size | Beginners. Easier to reach, faster exits |
| Average Volume | Target based on average of all trade sizes | Experienced traders. More balanced approach |
Example: With a 10-pip target and Initial Volume method, you need only $10 profit per lot of your original trade. With Average Volume method, you need $10 profit per lot of the average position size across all trades.
Practical Examples
Example 1: Conservative Recovery Strategy
Scenario: You buy EURUSD but price starts dropping. Conservative recovery settings help limit risk.
| Trade | Price Level | Position Size | What Happened |
|---|---|---|---|
| Initial BUY | 1.2000 | 0.10 lots | Original signal execution |
| Recovery 1 | 1.1970 | 0.15 lots | Price dropped 30 pips, first recovery |
| Recovery 2 | 1.1940 | 0.23 lots | Price dropped another 30 pips, second recovery |
Settings Used: Max Trades: 2, Initial Distance: 30 pips, Distance Multiplier: 1.0, Lot Multiplier: 1.5, Recovery Target: 15 pips.
Result: Average entry price is now ~1.1977. If price recovers to just 1.1992 (15 pips from average), all trades close with profit despite being 8 pips below the original entry.
Example 2: How Recovery Saves a Bad Trade
Your Trading Situation: You sold GBPUSD expecting it to fall, but it keeps rising against you.
Without Recovery:
- Sold 0.20 lots at 1.3000
- Price rises to 1.3100 (100 pips against you)
- You're facing a significant loss
- Need price to drop all the way back to 1.3000 to break even
With Recovery System:
- Original: SELL 0.20 lots at 1.3000
- Recovery 1: SELL 0.30 lots at 1.3040 (40 pips up)
- Recovery 2: SELL 0.45 lots at 1.3080 (another 40 pips)
- Your average entry is now ~1.3052
- Need price to drop only to 1.3037 for 15-pip profit target
The Recovery Advantage: Instead of needing a 100-pip reversal to break even, you now need only a 63-pip drop (from 1.3100 to 1.3037) to achieve profit. The recovery system turned a potential disaster into a manageable situation.
Example 3: When Recovery Reaches Maximum Trades
Scenario: A strong trend against you reaches your maximum recovery limit. What happens next?
| Stage | Price Movement | EA Action | Your Options |
|---|---|---|---|
| Max Trades Reached | Price continues against you | No more recovery trades placed | Wait for reversal or manually manage position |
| Price Stabilizes | Market stops moving against you | All trades remain open, monitoring for exit | Patient wait for target or reduce target manually |
| Market Reverses | Price moves back in your favor | Automatic exit when profit target reached | Let system handle exit or take manual profit |
Important: Once you reach your maximum number of recovery trades, the EA stops adding positions. Your existing trades will remain open and close together when the profit target is reached, but no additional recovery will occur.
Troubleshooting
Common questions and solutions when using the recovery system.
| Question/Problem | Why This Happens | How to Fix It |
|---|---|---|
| My trade is losing but no recovery opened | Distance threshold not reached or feature disabled | Check Recovery Management is "Enabled" and reduce Initial Distance if needed (try 20-30 pips). |
| Recovery trades seem too small | Lot Multiplier set too low | Increase Lot Multiplier to 1.5-2.0 for more recovery power. Remember this increases risk. |
| Profit target never reached | Target too high or market trend too strong | Reduce Recovery Target to 5-15 pips or switch to Initial Volume calculation method. |
| Too many recovery trades placed | Maximum Trades set too high | Reduce Maximum Trades to 1-3. Start conservative and increase gradually with experience. |
| Position size grew too large | Lot Multiplier creating exponential growth | Use smaller Lot Multiplier (1.2-1.5) or reduce Maximum Trades. Always calculate total exposure first. |
| Recovery only works on some trades | Using Signal mode but not all signals have re parameter | Either switch to "Enabled" mode for all trades or ensure re is added to signals needing recovery. |
| Stop loss hit before recovery could help | Initial Distance larger than Stop Loss distance | Set Initial Distance smaller than your Stop Loss distance, or remove SL to let recovery work. |
| All trades closed unexpectedly | Profit target reached, this is normal operation | This is correct behavior. If target seems too low, increase Recovery Target setting. |
Risk Management Reminders
- Always test recovery thoroughly on demo accounts before live trading.
- Start with minimum position sizes. Recovery can multiply your exposure by 10-20x.
- Calculate your maximum possible loss before enabling recovery.
- Consider removing stop losses when using recovery to give the system time to work.
- Never use recovery on money you cannot afford to lose completely.
For complete parameter references and additional configuration options, see the Configuration Guide.