Setting breakeven

Trading Discussion
1

Hi Folks,

As part of my own learning process, I am putting out to you, the community, the question as to when do you decide to move your stop loss to break even?

Please note, this is not a question (and subsequent debate) if a stop loss should be used or not. I am asking specifically about your [I][B]thinking process[/B][/I], as well as technique, on when you decide to move your stop to breakeven.

As for me, If there is a strong confident move in the market, I let in run for two or three candles in that given time frame and then set it to B/E. If the market is seemingly undecided, and it did not take off in the direction I had anticipated, then I move it to B/E and just let it play out in what ever way it does. At least I had taken the risk out of my position.

I am curious to hear your way of setting B/E, I am also keeping an open mind to the various ways we manage trades.

Thanks so much guys and safe trading.

Cheers!

2

Are you getting what you want with your approach? In case you do then I recommend not changing. I understand wanting to know what others do and keeping an open mind, but if it isn’t broke don’t fix it.

3

I agree with LastBear…

A stop should be a balanced compromise between limiting losses and maximising profits, so that you allow enough room for retracements within a trade but limit losses should it fail.

Not all trades will work in a way that bringing price to break-even will be possible: for example, price may suddenly swing up and hit your profit target before you have time to react…

Also, trailing stops may work better in a trending pair, so that you can let your trade run…

Your question is a good one: some people will use ‘instinct’, and some will use strict rules; most, I imagine, will use a mixture of the two.

Happy trading!