From TradingView · · 40s
Trading Craft 101 Lesson 08: Breakeven Stop Myth
A trading strategy that moves stops to breakeven after small profits actually reduces returns.
In brief
A trading strategy that moves stops to breakeven after small profits actually reduces returns. Moving stops to breakeven after small profits cuts trading profits by 10.2% per trade. Originally reported by TradingView.
The Habit
The moment a trade is a little in profit, the stop moves to breakeven.
The Test
Nasdaq 100 daily backtest over ten years: 334 trades with stop at 1.5 atr below entry.
The Result
Stop stays: +32.0r total profit, +0.096r per trade, 54.8 percent winners.
The Rule
Changing exit rules requires testing like a new strategy to avoid measuring the change.
At a glance
Moving stops to breakeven after small profits cuts trading profits by 10.2% per trade.
