Breakeven

Risk

Breakeven is the price level at which a trade neither gains nor loses money after costs.

Breakeven is the price level at which a trade neither gains nor loses money after accounting for commission and slippage. Many traders move stops to breakeven after a position has moved a defined amount in their favor, to convert a winner into a no-risk position.

In prop trading the breakeven-stop technique interacts with consistency rules and minimum holding periods. Closing too many trades at breakeven can leave a trader short of the minimum-trading-day count or skew the P&L distribution under the consistency rule.

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