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There are a number of systems that use the accumulation of position volumes over time, but their major drawback is that they often disproportionately increase risk compared to the potential for profit.
DRS, on the other hand, uses a completely different method, where instead of increasing volumes on new trading positions, it only increases the entry range, which not only greatly reduces potential future losses, but also increases the average value of future potential profits.
Strategy entry rules
Entering long positions
- Hitting the buy level from above
Entering short positions
- hitting the sell level from below
How to trade with the strategy
First of all, you need to place the first level (see the chart below - the highest blue level), from which all the others are based later (some people choose the placement completely randomly, others prefer round numbers, as in our example, so it all depends on personal preferences). Then the placement of the lower levels occurs, where the range is chosen as the name probably suggests, the first range at a certain spacing and then each subsequent one is twice as large as the previous one (see below - range1=100pips, range2=200pips, etc.).
Once the levels are placed, then you just have to wait until they are hit (entry signal), based on which, you enter a trading position. If the price reaches a higher level after the entry (in case of long positions, it is the other way around for shorts), then this profitable position is closed and then it is possible to enter a new trading position again at a lower level (see chart below - buy3).
Please note: if a trade is still open at a level, then no further positions are ever opened at that level, which in that case would extremely increase the trading risk the moment the markets take a stronger and longer lasting trend.
DRS is one of the trading systems that do not continuously quantify long-term success, as this system is set up in principle to close only profitable trades and leave losing trades running until they also reach a certain profitability.
