Para 6. Say you have a buy position and it starts to go bad and the price pulls back to the entry point of that buy, you estimate the price to pullback further… You open 2 sell positions at the original entry point and of equal lot size to the buy (Say buy is 0.05) you now have two sells at 0.05.
So as price moves downward against your original buy position, you have one position which is hedging the trade (locking the loss) and the second position attempting to make a profit.
So if both sell trades move say 10 - 20 pips down, when you -close all- at a set point (lets say 12 pips). You have negated the losing buy position (minus commision/spread) with one of the sell positions and have made a 12 pip profit (minus commision/spread) with the second.
It’s a technique that is used so you don’t require a tight stop loss (use a long catastrophe stop) and to convert a losing position into a profit.
Hence in the US hedging like this is banned because if the trade goes against you… well… they want your money…
The OP’s details are more comprehensive than my explanation, allowing you to continue to stay in the market. I have shown a simplified version of part of the strategy.
Can it work?.. a skilful trader can make it work… I have used it before and it does work… highly stressful and can turn a small loss into a bigger loss quite easily… I notice this is a very old thread, so maybe search other sites like ForexFactory or Youtube for maybe a demonstrated version… The FX elite on BP will vomit all over this… just watch.
As the OP says, give it a go on a demo… try everything on a demo… don’t let muppets on BP hold you back…