I'LL take a stab at this,
I think the idea is to limit our loss and have less of a average to make up.
Even it continues to go against us , The loss will be less as we got in higher so less pips to our stop loss.
That is how I see it any way.
Plus you could put your stop back at the top of the pattern if you wanted, it should be close there anyway. But you wouldn't have the extra pips lost from where you got out with your 10 pip stop loss and where you got backin.
Say it retraces 20 pips you take a 10 pip loss reenter at the 20 pip area and it still goes against us , you save 10 pips.
That is my take on it anyway..
Ken