Definition #
Break Even is like the “balance point,” that is, it is the point at which the sum of profits equals the sum of losses and costs.
Interpretation #
For a single trade: The Break Even is generally the original entry price adjusted for any direct costs of the trade, such as the broker’s commission.
For a series of trades: Break Even is reached when the cumulative profit (total gains – total losses) equals zero, taking into account all commissions and other costs.
Application #
The concept of Break Even is important in trading for several reasons:
- Risk Management: Many traders use the strategy of moving their stop loss to the Break Even point once the trade has advanced far enough in their favor. This ensures that, in the worst case, they won’t lose money on that trade (apart from possible small commissions).
- Evaluate profitability: Knowing where the break even point is helps determine how much price movement is needed to start making real profits.
Parameters #
Signal type
The element can function in only one way. In trigger mode, it provides a signal at the instant the element condition occurs. For the rest of the time, even if the condition is maintained, the trigger mode will not give any more signals (until a new condition is reactivated).
NOTE: It is recommended to keep only one element with trigger signal type per rule, and the rest of the rule elements (optional) as filters.
Parameters configuration
This option can only be set for closing transactions, both purchases and sales.
Break Even Distance – [default: 50].
Profit Points – Profit points to close once the break-even level is reached.
