Trading mechanics
Break-even stop
Moving a stop loss to the entry price once a trade is far enough into profit, so the position can no longer produce a loss. It removes risk from the trade at the cost of a tighter exit.
GFN’s figure
Retiring a trade's risk restores the daily buffer: on a $100,000 2 Step account with a $5,000 allowance, a position risking $500 moved to break-even returns $500 of room for the rest of the session.
In detail
Break-even stop,explained
Moving to break-even is genuinely useful on an account with a hard daily limit, because it retires the risk of that trade and returns the allowance it was using.
Moving too early is the more common error. A stop at entry inside the instrument's normal noise will be hit by ordinary movement, turning a live trade into a scratch for no analytical reason.
Related
Terms thatcome with it
Most rules only make sense next to the ones they interact with. These are the entries this one depends on.
Stop loss
A resting order that closes a losing position at a predetermined level. It is the mechanism that turns a risk-per-trade figure into an actual limit rather than an intention.
Trailing stop
A stop loss that follows the price at a fixed distance as a position moves into profit, and stays put when it moves back. It locks in gains without capping the trade at a target.
Partial close
Closing part of a position while leaving the remainder open. It banks some of the result and reduces the risk carried by the trade without giving up exposure entirely.
Buffer
The distance between current equity and the nearest breach level. It is the only figure that tells you how much risk is available right now, and it shrinks with commission and floating losses as well as with realised ones.
Daily loss limit
The most an account may lose in one trading day before it breaches. Calculated as a percentage of the previous day's closing level, it resets at a fixed time each day and is the rule that ends most evaluations.
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