【FX Course】Is it okay to re-enter in the same direction after stopping out?
Is it okay to re-enter in the same direction?
Hello, this is Leo.
When you trade, you encounter situations like this.
↓
It hit the stop loss.
↓
But afterward it might go up again.
At this moment,
many people wonder
whether they should enter again.
In my view,
you can re-enter
Yes.
However, very important is that
“entering because you want to recover” is a different matter
entails.
Stop losses ≠ every direction is wrong
For example, daily and 4-hour charts both show uptrend.
I bought targeting a pullback on the 1-hour chart.
But, entry was a bit early, and it was stopped out once.
After that, it pushed lower and then the 1-hour chart turned up again.
In this case, just because the initial trade was stopped out,
completely
yet.
Re-entry is not a continuation of the first trade
This is quite important.
The first trade has been stopped out once.
In other words, that trade ends there.
If you enter next,
as a new trade
It is necessary.
Not “I failed earlier, so I must recover now.”
The most dangerous thing is re-entering to recover
For example, you lose 10,000 yen.
Right after that,
“I can buy cheaper than before”
“If I make 20,000, I can recover”
and you enter.
This is not chart-based but
as a reference
which is very risky.
If you re-enter, you need a new basis
For example, after the initial buy is stopped out,
↓
the low is raised
↓
the 1-hour pullback breaks
↓
a new pullback forms
If it comes this far, the situation is different from the initial one.
Then,
you can consider re-entering as a new buying scenario
.
Be careful about entering in the same place multiple times
Conversely,
stop loss.
buy again soon.
stop loss again.
buy again.
If you repeat this pattern,
three or four losses
may occur.
If the market hasn’t changed and you keep entering for the same reason,it is not re-entrybut
There is also value in setting how many times you re-enter
If you tend to re-enter often, you may set a limit as a rule.
If you have two stop losses, step away from the chart once
Don’t enter until there is a new high/low
This is the shape.
Even this makes it much easier to prevent emotional rapid entries.
Do not increase lot size on re-entry
This is also very important.
If you lost once.
You want to recover on the second.
Therefore, you double the lot size.
Doing so greatly increases the risk of re-entry.
the next risk amount is separate
For the next trade you should also consider the same capital management as always.
For example, in EUR/USD
For example, you are aiming to sell at a retrace on EUR/USD.
You sold near the 1-hour downtrend line.
But, temporarily it breaks up triggering a stop loss.
After that, the breakout doesn’t hold, and it returns below the line.
Furthermore, the 1-hour chart makes a new low.
In this case,
but “the selling conditions have aligned again, so I sell”
is how I think about it.
The same approach applies to indicator tools
You got a signal and entered.
Stop loss happened.
Afterward, another signal appeared.
Even then, you do not need to skip just because you lost before.
Conversely, you are not necessarily entering this time just because you lost before.
Market conditions
Position of the signal
Stop loss level
RR
We verify again.
If conditions are aligned, consider it as a new single entry.
After a stop loss, take time before looking at the chart
Right after a stop loss, judgment tends to be most unsettled.
Therefore, rather than pressing the button immediately,
I think that is fine.
In the meantime,
whether the initial direction is still valid
whether a new entry condition has appeared
to review.
Good vs. bad re-entry
New reversal confirmation
New entry rationale
RR also re-confirmed
Lot size as usual
I want to recover
Enter again quickly
Increase the lot size
Rapid entries at the same place
Just because you stop loss doesn’t mean you must never target that direction again.
However, if you re-enter,
This is important.
Do not enter to recover previous losses.
Do not increase the lot size.
Do not repeatedly enter at the same place.
And, your next entry should be treated as completely new
one.
“enter because the conditions aligned again”
Even this difference can significantly change trades after a stop loss.
