What does 'Breakeven' Stop Loss do?

What is it?

'Breakeven stop loss is a smart feature that automatically moves your stop loss as your trade progresses.

Here is an example:

BTCUSDT trade

Trade Entry Price = $8,000

Stop Loss (SL) = $7,500

Take Profit target 1 (TP1) = $8,250

Take profit target 2 (TP2) = $8,500

Take profit target 3 (TP3) = $8,750

Take profit target 4 (TP4) = $9,000

If you have enabled Break-Even option for this trade then the following will happen:

TP1 is HIT -> SL will move to entry price (moves from $7,500 up to $8,000)

TP2 is HIT -> SL will move to TP1 (moves from $8,000 up to $8,250)

TP3 is HIT -> SL will move to TP2 (moves from $8,250 up to $8,750)

TP4 is HIT -> Trade closes as all targets achieved

…….

In other words, if TPn is HIT -> SL will move to TP n-1

If there are more profit targets then SL will keep moving up the ladder in a similar fashion.

Where can I find it?

NOTE: This option is turned ON by default

If you are using the trade form it can be found in the Stop Loss details section:

Advanced Options

Under the advanced options, you can set your breakeven type to:

Move SL UP (1 step behind) when TP target hits - If this option is chosen, then your stop loss will move to the level below the highest TP level hit. (This is the type selected by default)

Move SL UP (2 steps behind) when TP target hits -  This will make your stop loss move to your entry price once T2 is hit. Once T3 is hit, Stop loss will move to T1. By moving the stop loss two steps behind, this decreases the risk of you being stopped out prematurely while keeping your gains relatively safe.

Move SL to entry price only - This option sets your stop loss level to move to your entry price level upon hitting T1 but will remain there regardless of the number of targets hit thereafter.

Should I always use this?

Advantage

The advantage of using this feature is that it leaves you with less risk. If your trade reaches target 1 and then your stop loss moves to your entry price you are 'guaranteed now to make a profit as even if the market turns around in the wrong direction you will exit your trade at 'breakeven' plus the profits from the portion gained from target 1.

Disadvantage

The disadvantage of using this feature is that it means you are more likely to be 'stopped out' of a trade. If your stop-loss moves up it will be closer to the current price. If the market turns around in the wrong direction you will exit your trade. The price may go on to reverse again in the right direction and achieve your higher targets. Less risk sometimes means fewer rewards.

Remember: Your money, Your Responsibility