Before moving on, I guess we should discuss the idea of breakeven and how to calculate it. Hope we're not in for another round of discussions LOL.
Breakeven suggests zero loss and zero gain on the trade. Let's say you bought EU at 1.2344 ASK/1.2342 BID (spread is 2 pips) and you're trading 1 mini-lot, then your actual cost is just the spread of 2 pips. So, the price would have to move to 1.2346 ASK/1.2344 BID which would be the breakeven price.
Some traders may use their stop loss as well and include that in the calculation of their breakeven price level. Any takers on that method?
After that, we'll do another short calculation to determine if a trading system that is very clearly defined is functioning at breakeven.
From there, we'll look at another risk/money/trade management method.
FX4
Breakeven suggests zero loss and zero gain on the trade. Let's say you bought EU at 1.2344 ASK/1.2342 BID (spread is 2 pips) and you're trading 1 mini-lot, then your actual cost is just the spread of 2 pips. So, the price would have to move to 1.2346 ASK/1.2344 BID which would be the breakeven price.
Some traders may use their stop loss as well and include that in the calculation of their breakeven price level. Any takers on that method?
After that, we'll do another short calculation to determine if a trading system that is very clearly defined is functioning at breakeven.
From there, we'll look at another risk/money/trade management method.
FX4