In any type of business, there is such a thing as a break-even zone, in fact, this is a kind of border between losses and profits, the intersection of which allows you to hope for a successful outcome of the transaction.
If we consider this concept in relation to a standard type of business, then the break-even zone is actually the moment when the company’s expenses equal its losses and the profitability level is 0. Often a similar
term is used in relation to Forex trading, in this case, the break-even zone begins from the moment when the favorable movement of the exchange rate fully compensates for the accrued commission. How is the break-even zone used in forex trading?
As you know, the exchange rate moves in leaps, its curve consists of trend movement and corrections, it is this factor that determines the tactics of application.
Everything is pretty simple.
• We open an order to buy (or sell).
• We are waiting for this order to start making profit, while the amount of profit should be at least 10-15 points. It is possible and more, the main thing is not too close to the existing price, as this can lead to frequent stops being triggered.
• We modify the order by setting the stop loss at the mark – opening price + spread size .
Now, if a significant correction occurs, the transaction will close with a zero result, if this option does not suit you, we analyze the likely size of the correction and begin to move the stop after the price, already fixing profits.
One of the automated approaches to profit taking can be the installation of a trailing stop .
