How do you handle a trade that reverses right after entry?

You enter, price ticks against you immediately, and every instinct says to close early or double down. Both reactions are usually wrong, and beginners learn this by paying for it.

How do you handle a trade that reverses right after entry? — risk-reward diagram
A risk-reward ratio of 1 to 2

What do you do in that first minute against you?

  • your actual reaction, honest version
  • the rule you now follow when entry goes bad immediately
  • how you tell "normal noise" from "wrong idea"
How do you handle a trade that reverses right after entry? — candlestick anatomy diagram
The parts of a candlestick: wick, body, open and close

The stop-loss guide is about deciding that before you enter.

Background: Where to place a stop-loss: structure, volatility and time stops

A stop-loss belongs where your trade idea is proven wrong, not at a round number of pips. Here are the main methods and the mistakes that trigger stops early.

How far away should a stop-loss be?

Far enough that normal price movement doesn't reach it, at the point where the reason for the trade would be proven wrong. The position size should then be set so that distance costs a fixed share of the account.

Why was my stop-loss hit when the chart didn't reach it?

Charts usually show the bid price, but sell positions are closed at the ask. When the spread widens, the ask can reach a sell stop while the bid line on the chart stays below it.

Read the full guide

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