Shaun, I assume you're talking about a Lay-Back scenario whereby the Back bet is your hedge against further losses?

If so, it's something I've been looking at (by no means an expert) and can only summarise with, "there's no fix-all formula". Some markets just jump from say $1.80 to $1.30. Others, just when you think you've found a limit they touch it, you take a loss, and it bounces straight up and you could've made a motza if you held your nerve! Very difficult.

My summation is, only hedge manually (not with a bot), watching live vision, as most of the moves that go against you are wishful thinking Backers or blind bots just following an algorithm, whilst you can plainly see the horse is about to get swamped by fast approaching backmarkers. Good luck.

Whilst on the subject of motzas, taking advantage of those huge price spikes is a thread on the Bet Angel forum (accessible to anyone) called 'Fat Fingers". You set a bot up with limits way out of the market, hoping to catch one? Could be a nice 'xmas stocking' filler, working in the background.
Here's a youtube: https://www.youtube.com/watch?v=JOmK7dQqnR4