Break-Even Calculator

Understanding Break-Even in Forex

Every trade starts at a loss equal to the spread. If EUR/USD is quoted at 1.1000/1.1002 and you buy at 1.1002 (the ask), the bid price is still 1.1000 — meaning your position is immediately down 2 pips. To reach zero P&L, the bid must rise to 1.1002. That's your break-even price.

For a long EUR/USD trade entered at 1.1000 with a 1.2 pip spread: break-even = 1.1000 + 0.00012 = 1.10012. The cost of that spread on 1 standard lot is 1.2 × $10 = $12.00.

Spread Cost vs Break-Even Price

The break-even price only depends on your entry price and the spread — it does not change with position size. However, the dollar cost of reaching break-even scales with lot size. A 1.2 pip spread costs $12 on 1 lot, $1.20 on 0.1 lots, and $0.12 on 0.01 lots. The price target remains the same regardless of volume.

If your broker charges commission, add the commission pip equivalent to the spread. For a $7 round-turn commission on EUR/USD: $7 ÷ $10/pip = 0.7 pips. Total cost to break even = 1.2 + 0.7 = 1.9 pips of movement required. Use the commission calculator to factor in broker fees.

Why Break-Even Matters for Stop Loss Placement

Traders often set stop losses at technical levels without accounting for spread. A stop loss 20 pips from entry plus a 1.2 pip spread means you actually lose 21.2 pips when stopped out. Over hundreds of trades, this unaccounted spread can significantly impact your risk-reward ratio. Always include spread in stop loss calculations for precise position sizing.

Frequently Asked Questions

How do you calculate break-even price in forex?

For a long trade: Break-Even = Entry Price + Spread. For a short trade: Break-Even = Entry Price - Spread. Example: EUR/USD long at 1.1000 with 1.2 pip spread = 1.1000 + 0.00012 = 1.10012.

How many pips to break even after spread?

The number of pips to break even equals the spread. If the spread is 1.2 pips, price must move 1.2 pips in your favor just to reach zero P&L. This is why tight spreads matter — every pip of spread is a pip you must recover.

Does break-even change with lot size?

The break-even price is the same regardless of lot size — it depends only on entry price and spread. However, the dollar cost of the spread scales with lot size. 1.2 pips on 1 lot costs $12; on 0.1 lots it costs $1.20. The price target is the same.

What happens to break-even if I add commission?

Commission adds to your total cost. An ECN broker charging $7 round-turn effectively adds ~0.7 pips to your break-even on EUR/USD (since $7 ÷ $10/pip = 0.7 pips). Total break-even = spread + commission in pip equivalent.