Why it looks good in backtests
Most of the time price eventually comes back, so the doubled position closes with a small profit and the equity curve rises smoothly. The risk is hidden in the rare long losing streak: after ten losses the position is 1,024 times the original size, and the account usually runs out of margin first.
How to spot it
Look for lot multipliers or “recovery” parameters in the EA settings, a win rate far above 80%, and a maximum drawdown that is small for years and then suddenly huge. The EA Arena tags EAs that scale position size after losses with a Martingale category and a higher risk rating.