Who this is for — Anyone who tends to lock in profits too early or let losses run unnecessarily. Break even imposes an objective protection threshold.
Break even means moving the stop to entry once the trade has already confirmed. From that point, nominal risk is zero, net of costs.
In plain terms — When the market gives you room, you turn a risky trade into a protected one: it either continues, or you exit without meaningful damage.
Bronze prerequisite — Before this lesson: stop-loss, trade-size, take-profit, risk-per-trade. See bronze-path.
When to move to break even
The decision must come from a rule, not from anxiety:
- Reaching a minimum profit level (e.g. +1R).
- Confirmation of favourable structure (confirmation).
- Execution of a partial-exit.
If you move to BE too early, normal pullbacks will often stop you out. If you do it too late, you protect nothing.
Example — Long entry with initial stop at -1R. At +1.2R you close 30% of the position and move the stop to entry. The trade stays open with a trailing stop, but the original risk is already neutralised.
Traps to avoid
- Moving to BE after only a few ticks in profit.
- Using break even as a substitute for a technical-stop.
- Forgetting commissions and spread in the real breakeven calculation.
- Widening the stop again after placing BE.
Card
- What it is: moving the stop to entry price.
- Goal: zero out residual risk once the trade is validated.
- Correct use: apply it only with measurable triggers in the plan.
Silver path — Module: Position management. Part of silver-path.