Break-Even Stop
Quick Definition
Moving a trade's stop-loss order to the exact entry price (plus spread/commission) once the position reaches a predefined profit milestone, eliminating downside risk.
Detailed Explanation
Break-Even (BE) stops transform an open position into a "risk-free trade". Automated EAs automatically trigger BE stops once a 1:1 or 1:1.5 Risk-to-Reward ratio is achieved, allowing traders to hold runners stress-free.
Key Trading Rules & Takeaways
- Completely eliminates monetary risk on open positions.
- Incorporates commission and spread offset (e.g. Entry + 2 pips).
- Standard risk feature in algorithmic EA trade managers.
Calculate & Automate Break-Even Stop
Eliminate manual calculations and enforce automated risk controls with our specialized tools.
Frequently Asked Questions
Can a break-even stop still lose money?
In severe market gaps or high-impact slippage, the stop order may fill slightly past entry, but in normal liquidity conditions it guarantees zero loss.