Recovery Zone Hedging [Starbots]

11 ส.ค.

Recovery Zone Hedging Strategy — Advanced Adaptive Hedge Recovery System

This strategy introduces an innovative zone-based hedge recovery approach tailored to TradingView’s single-direction trading model. Designed for serious traders and professionals, it combines multiple technical indicators with dynamic position sizing and adaptive take-profit mechanisms to manage drawdowns and maximize recovery efficiency.

How Recovery Zones Are Calculated

The strategy defines recovery zones as a configurable percentage distance from the last executed trade price. This percentage can be adjusted to suit different market volatility environments — wider zones for volatile assets, tighter zones for stable ones. When price moves into a recovery zone against the open position, the strategy places a hedge trade in the opposite direction to help recoup losses.

Dynamic Take-Profit Calculation

Take-profit targets are not fixed. Instead, they increase dynamically based on any accumulated losses from previous hedge trades. For example, if your initial target is 2%, but you have a $5 loss from prior hedges, the next take-profit target adjusts upward to cover both the loss and your profit goal, ensuring the entire hedge sequence closes in net profit.

Originality & Value

Unlike traditional hedging or recovery scripts that rely on static stop losses and fixed trade sizing, this strategy offers:
- Dynamic Hedge Entry Zones: Uses configurable percentage-based recovery zones that adapt to price volatility, allowing precise placement of hedge trades at meaningful reversal levels.
- Multi-Indicator Signal Fusion: Integrates MACD and Directional Movement Index (DMI) signals to confirm trade entries, improving signal accuracy and reducing false triggers.
- Exponential Position Sizing: Each hedge trade’s size grows exponentially using a customizable multiplier, accelerating loss recovery while carefully balancing capital usage.
- Adaptive Take-Profit Logic: The take-profit target adjusts dynamically based on accumulated losses and profit margins, ensuring that the entire hedge sequence closes with a net gain.
- Capital Usage Monitoring: A built-in dashboard tracks real-time equity consumption, preventing over-leveraging by highlighting critical capital thresholds.
- Fail-Safe Exit Mechanism: An optional forced exit beyond the last hedge zone protects capital in extreme market scenarios.

This strategy’s layered design and adaptive mechanisms provide a unique and powerful tool for traders seeking robust recovery systems beyond standard hedge or martingale methods.

How Components Work Together

- Entry Signals: The script listens for MACD line crossovers and DMI directional crosses to open an initial trade.
- Recovery Zones: If the market moves against the initial position, the strategy calculates a recovery zone a set percentage away and places a hedge trade in the opposite direction.
- Position Scaling: Each subsequent hedge trade increases in size exponentially according to the hedge multiplier, designed to recover all previous losses plus a profit.
- Take-Profit Target: Rather than a fixed target, the TP level is dynamically calculated considering current drawdown and desired profit margin, ensuring the entire hedge sequence closes profitably.
- Cycle Management: Trades alternate direction following the recovery zones until profit is realized or a maximum hedge count is reached. If needed, a forced stop-out limits risk exposure.

Key Benefits for Professional Traders

- Enhanced Risk Management: Real-time capital usage visualization helps maintain safe exposure levels.
- Strategic Hedge Recovery: The adaptive recovery zones and exponential sizing accelerate loss recoupment more efficiently than traditional fixed-step systems.
- Multi-Indicator Confirmation: Combining MACD and DMI reduces false signals and improves hedge timing accuracy.
- Versatility: Suitable for multiple timeframes and asset classes with adjustable parameters.
- Comprehensive Visuals: On-chart recovery zones, hedge levels, dynamic take-profits, and equity usage tables enable informed decision-making.

Recommended Settings & Use Cases

- Initial Position Size: 0.1–1% of account equity
- Recovery Zone Distance: 2–5% price movement
- Hedge Multiplier: 1.5–1.85x growth per hedge step
- Max Hedge Steps: 5–10 for controlled risk exposure

Ideal for trending markets where price retracements create viable recovery opportunities. Use caution in sideways markets to avoid extended hedge sequences.


Important Notes

- TradingView’s single-direction model means hedging is simulated via alternating trades.
- Position sizes grow rapidly—proper parameter tuning is essential to avoid over-leveraging.

This script is designed primarily for professional traders seeking an advanced, automated hedge recovery framework, offering superior capital efficiency and loss management.

12 ส.ค.

เอกสารเผยแพร่

- Added Backtest Range
You can now set a custom backtesting range or start forward testing from a specific date and time.
- Added Hedge Counter
Track how many times the strategy opened a specific number of hedge trades throughout the entire history. This tool helps you monitor performance and identify how often certain hedging levels are reached.

13 ส.ค.

เอกสารเผยแพร่

Quick fix of the Hedge counter table. It was counting the initial open trade as hedge 1.

17 ส.ค.

เอกสารเผยแพร่

Added new Position Sizing Mode, as requested. It gives you an option to choose how to trade. '% of Equity' or 'Fixed Buy Amounts' (USDT/USD/EUR,..)

31 ส.ค.

เอกสารเผยแพร่

Added VWMA and RSI entry conditions.