what is break even in forex

In forex trading, the break even point is the point at which a traders profits and losses are equal. It is the price at which a trader has entered into a trading position. In terms of price action, it is the level at which the risk on the trade is recovered. For example, if a trader buys GBP/USD at 1.4050 and then closes the position at 1.4050 with zero profit and zero loss, they have "broken even". Setting a break-even point is important in forex trading because it helps to limit losses and protect a trader’s capital. When a trader sets a break-even point, they are essentially locking in a certain level of profit, which means that even if the market moves against them, they will not lose any money. To set a break-even point in forex trading, a trader needs to determine the price level at which they will exit the trade without incurring any loss. They can adjust their stop-loss to their break-even point once the price moves in their favor, which will help them lock in their profits and reduce their risk.