When to Move Your Stop to Break-Even

One stop moved to break-even

Break-even is the price a trade started at, and moving a stop to break-even means moving it up to that price once the price has gone some way ahead. Take the euro against the dollar bought at 1.17166, its 10:15 close on 17 December 2025, with the stop 25 pips below at 1.16916, worth 100 dollars at 0.40 lot. At 16:45 the price was first 25 pips ahead. Moving the stop to 1.17166 then means the worst the trade can do from that moment is close at zero pips. Zero pips is not zero dollars, because the spread and the commission are still paid — about 5 dollars at this size, in example figures. The worst case fell from 100 dollars to the costs.

A wheel chock on a hill

Picture a car on a hill with a chock behind its wheel. The car may climb further or stand where it is, but it cannot roll back down past the chock, because the wedge was put there once it had made some ground. A stop moved to break-even is that chock. The trade has moved ahead, the stop is moved up to the price it started at, and from then on it cannot roll back into a loss beyond its costs. The chock does not push the car up the hill, and it has no idea whether the car will climb any further. It only stops the roll back, and that is the whole of the move.

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