Understanding this loss recovery strategy

Swingman explained this Loss recovery strategy to me and I still have a hard time understanding it. At first I thought I get it. But then... Do you guys understand it?

let's see an example:
Price is 1,550
RecoveryZone = 50 and ExitZone = 150

1. I set Market Buy = 1.550 with SL = 1.500 and TP = 1.700 (1 lot, as in Excel Sheet)

2. I set a Pending Sell = 1.500 with SL = 1.550 and TP = 1.350 (0.40 lots)
If order 1. does not reach TP and is a loss, but Sell is a win, I have
from 1. -50 * 1 = -50 and
from 2. + 150 * 0.40 = + 60.
Total = +10

3. When the sell order starts, I set a pending buy as for order 1 (with 0.53 lots).
If Sell 2 is a loss, starts the buy order 3.
If he wins, we have two losses from 1 and 2 (-50-20 = -70) and a win from 3 (+ 150 * 0.53 = + 80)
Total = + 10

If your stop loss on the BUY is 1.500 and the SELL is 1.550 and you are buying at 1.550 and selling at 1.500, what happens if the price goes back and forth between 1.550 and 1.500 many times? Wouldn't you just keep hitting the stop loss and losing money?

I'd think that would be the case and if so, the spreadsheet does not make as much sense, but maybe I'm missing it? I suppose his assumption is that eventually the market starts to move in one direction?

You would indeed start losing money, but as you increase the lot size (Martingale) you will recover all losses eventually if the market moves into the right.

The explanation above does however not correspond with the excel sheet. That is my confusion. Or I miss something here.

What you missed is simply to change the lot size to 1 or any other value you desire, instead of the 0.8 lot that it seem to be the default in the excel.