Zone Recovery Hedging Strategy

What to do when the market goes against you?

No matter how good you are at taking the entry points, no matter how good you are at predicting the market, it is a matter of time before the market goes against your trade. What do you do when the market goes against you? Do you just take the loss and try to recover the loss later from other trades? Or, do you just sit there and watch in dismay as this one bad trade eats up your hard earned profit and the money you invested from your pocket?

Actually there is a way to avoid that. This method doesn’t use stop loss, or exit the bad trades or wait up hoping the market turns into your favour. This method uses a smart hedging strategy

Zone Recovery Hedging Strategy

Zone Recovery is an advanced hedging system. When the market goes against you by certain number of pips, you open an opposite trade by a trade with slightly bigger lot size. if the market keeps moving in this new direction, at some point the profit from the profit trade will overtake the loss trade, at which point you can close both the trades. If the market returns to the previous direction, the trade with the bigger lot size will accumulate loss faster than the older trade which is gaining. In this situation, calculate and open another trade with in that direction by which the initial trade and the third trade together will be bigger than the second trade. This back and forth hedging strategy can be continued until the market moves (yes it eventually has to move) to a level which can give profit.

The best pairs to use this method are EURUSD and USDJPY. The worst pair could be AUDCHF. Zone recovery can also be used together with the Heikin Ashi strategy to avoid entry when the market is flat.