Breakeven Stop
Definition
A breakeven stop moves the original stop-loss to the entry price (or slightly beyond, to cover spread/commission) once the trade has moved a configurable distance in profit. After breakeven activates, the trade cannot become a loss — but may exit early if price retraces back to entry. Common in trend-following EAs.
In-depth: Breakeven Stop
Breakeven stop is one of the simplest active trade-management techniques. The rule: after the trade has moved a specified distance in favour, move the stop-loss to a 'breakeven' level (entry price plus small buffer for transaction costs).
Mechanics: 1. Trade opens with initial stop-loss at distance R from entry (1R risk) 2. EA monitors unrealised profit on the trade 3. When unrealised profit reaches the trigger threshold (e.g. +1R, +1.5R, or a fixed pip distance), EA modifies the stop-loss to entry price + small buffer 4. The buffer (typically 0.05-0.2R) ensures the trade closes at small positive after spread/commission rather than exactly at entry