Recovery Zone Hedging [Starbots]

11 sie

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 sie

Informacje o Wersji

- 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 sie

Informacje o Wersji

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

17 sie

Informacje o Wersji

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 sie

Informacje o Wersji

Added VWMA and RSI entry conditions.