One of the inconsistencies that I found in the mentoring I received by Toby Alexander in the Christos Avatar Trading VIP Room is his stance on whether or not to re-enter a trade in the Spitfire system.
A brief background, the Spitfire system provides you with a visual signal to enter a trade when a trend changes direction (uptrend to downtrend, or downtrend to uptrend). Also, if you get stopped out for any reason during a trade and the trend direction does not change, you may receive other signals to enter a trade in that same trend direction. These signals are the TraderTrend bars.
As you may guess when you enter a trade in the middle of a trend your probably of a win for that trend is lower than if you enter the trade at the beginning of a trend. So, the win/loss ratio will be lower. However, this should not mean that you don’t enter the trend, since some of these trends continue for a long time and provide a big profit opportunity. It is a matter of trading style and rules.
During the beginning of the Christos Avatar Trading VIP room webinars, I asked Toby about re-entry rules and he said that you can take these re-entry signals. When I created my trading plan I wanted to include a re-entry criteria and Toby told me that it has a low expectancy and that he does NOT use re-entry rules in his trading, so I did not either. However, in one of his YouTube postings that he shared with us in the VIP room tilted “Live 6E Trade May 9, 2011 $2600 Profit” (http://www.youtube.com/watch?v=d7jeGS7pVNk) he clearly entered a trade using the re-entry rules. When I asked him about it and how that fits in his trading plans, he ignored my question.
Based on my experience and in my opinion, whether or not you take the re-entry signals depends on many factors and including your exit criteria, your trading style, and the chart at the time the signal is provided. If you have other insights into this, please share them.
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