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What is breakeven strategy?

Malvika

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Breakeven is a particular position at which the production cost and income both happen to be equal and there comes no profit no loss as the ultimate financial result. This is the explanation of breakeven in a nutshell and in general terms. In Forex trading, Breakeven occurs by the moving your stops from your initial stop position into the original entry position when price has turned in your favor. If the price turns around on you and stays you out, it will stay you out at your new Breakeven stops. Since it is set at the price you invested initially, so you will not lose any money. Being a fruitful trade management strategy, Breakeven should be used by every trader in the rest of his trade management.

When Breakeven stops should be worked by you?

Managing different types of trades and various market types is not easy at all, right? On this ground, Breakeven stops are there to help you operate your trades and to protect your major capital to a large extent. Breakeven strategy includes many significant strategies for implementation and use in your own trading in order to handle properly miscellaneous situations in trading market.

Capital protection: protecting capital is regarded as one of the crucial strategies under Breakeven method. When the price is in your favor, just move your original stops into your entry position and that is actually how Breakeven works in Forex trading.

Free trades: this is one of the best choices in moving to Breakeven and preventing your trade from being stopped out as well. You can just have Free Trades instead of moving to Breakeven and protecting your crucial capital. If you be in a trade and take profit target 1, then you can move the rest of your position to Breakeven. And you will be in a ‘Free Trade’.

Manage various market types in the distinct ways: another vital aspect of Breakeven strategy is the accurate management of different market types & situations in the different ways. Most of the traders commit the major mistake of treating all markets the same while handling their trades. Each distinguished trade should be managed according to the different market types. This is essential for every successful trader.

At last but not the least, embracing this powerful strategy will obviously help you gain 50 percent or more profit from your Forex trading all over the world.
 
Moving stop loss to Breakeven is good strategy, but need to have the right timing and depends on pairs. Pairs with greater volatility will caused us to loss the bigger profit opportunity. Hence, follow the plan.
 

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