Breakeven
Also called: break-even, be
The price at which closing your trade results in zero profit and zero loss — moving your stop here protects you from a loss.
Many prop firm traders move stops to breakeven at +1R automatically as a discipline rule. It caps their max loss per trade idea while still letting winners run — even if it costs some expectancy, the psychological benefit is worth it.
Related terms
Stop Loss
beginnerAn order that automatically closes your trade at a predetermined loss level — your first line of survival.
Risk-Reward Ratio
beginnerThe ratio between how much you risk on a trade and how much you stand to make — the math that makes trading profitable.
Trailing Stop
intermediateA stop loss that automatically moves in your favor as price moves — locks in profit while letting winners run.
Expectancy
advancedThe average dollar (or R) amount you can expect to make per trade over many trades — the math behind whether a strategy works.
R-Multiple
intermediateA unit that measures profit or loss in multiples of the initial risk taken on a trade — normalizes performance across different position sizes.
Sharpe Ratio
advancedA risk-adjusted return metric that measures how much excess return you're getting per unit of risk — higher is better.