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Next: is the average trade positive after costs?
Break-even is the cost of one trade. The expected value calculator combines it with win rate, average win and average loss.
What is included
- The calculator, with your own numbers
- The formula written out
- A worked example you can reproduce
- Where grid, martingale and DCA bots break the maths
Who it is for
- People running or testing a trading bot
- Anyone sizing a position or checking costs
- Readers learning how the numbers work
- Not advice, and not for placing trades
Key facts
- The break-even price is the exit price at which a trade, after all its costs, makes exactly zero.
- Long: break-even = (entry x (1 + entry fee) + spread) / (1 - exit fee). Short: (entry x (1 - entry fee) - spread) / (1 + exit fee).
- Costs are paid whether the trade wins or loses, so they raise the bar for every trade a bot takes.
- The smaller the profit target, the larger the share costs take. Narrow grids and fast scalping bots are exposed the most.
- Fees, spread and slippage differ by broker and exchange and change over time. Enter your own, and check them on a live fill.
How the calculator works
A trade has two legs, one to open and one to close. Each leg pays a fee, and the spread (the gap between the buy and sell price) is paid once across the round trip. The break-even price is the exit at which the gain on the price move exactly equals those costs.
Short: break-even = (entry x (1 - entry fee) - spread) / (1 + exit fee)
Round-trip cost = |break-even - entry| x units
The entry fee is on the value you open, the exit fee is on the value you close, and the spread is entered per unit. Funding, swap or financing charges for holding a position overnight are not included. Add them to the spread box if you want them counted.
A worked example
Take a made-up long trade: 10 units at $100, a 0.1 percent fee each way and $0.05 of spread per unit. The entry fee is 0.1 percent of $1,000, which is $1.00. The spread is 0.05 x 10 = $0.50. The exit value is about $1,002.50, so the exit fee is about $1.00. Together that is about $2.50, or $0.25 a unit. The break-even price is (100 x 1.001 + 0.05) / 0.999 = $100.25, which is a move of 0.25 percent. For a short with the same costs the price must fall to $99.75.
The same costs against different targets
The cost is a fixed percent of the price. What changes is how much of the move it eats. Using the 0.25 percent above, here is what is left of a profit target:
| Profit target per trade | Share eaten by 0.25% of costs | Left after costs |
|---|---|---|
| 0.25% | 100% | 0.00% |
| 0.5% | 50% | 0.25% |
| 1% | 25% | 0.75% |
| 2% | 12.5% | 1.75% |
Simple division of the 0.25 percent break-even move into each target. The exact break-even move is 0.2503 percent, which rounds to 0.25.
Where bots break the maths
A bot that trades often pays the cost often. The cost is not a one-time entry price. It is subtracted from every cycle.
- Narrow grids. A grid sells one level above where it bought. If the level spacing is 0.3 percent and the break-even move is 0.25 percent, each cycle keeps 0.05 percent. A small change in spread or fees turns it negative. The grid calculator shows the profit per level, and grid bot fees and costs explains what goes into it.
- Fast scalpers. A bot with a target of a few ticks needs the spread to stay small at the moment of the fill. Spreads widen in fast markets, exactly when the bot is busiest.
- Averaging bots. Each extra order adds another entry fee and another crossing of the spread. The average improves, but the cost line moves out with it.
- Slippage is not in this number. The fill you actually get can be worse than the quoted price. Enter a larger spread to include it.
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FAQ
Frequently Asked Questions
What is a break-even price?
It is the exit price at which a trade makes exactly zero after fees and spread. A long needs the price to rise to it, a short needs the price to fall to it.
Why is the short break-even below the entry?
A short profits when the price falls, so costs mean the price has to fall far enough to cover them. The break-even sits below the entry by about the same amount a long sits above.
Does the calculator include funding or swap?
No. Holding charges depend on the broker and the length of the trade. You can add them to the spread per unit box to see their effect on the break-even.
Why does the spread cost matter if I use limit orders?
A limit order can get the better side of the spread, but it may not fill. Whether the saving is worth the missed fills depends on the market. Check your own fills against the quoted prices.
What cost level should I enter?
The cost your account really pays: read it from fills, not from an advert. Run the page once with your numbers and once with costs 50 percent higher to see how fragile the answer is.
Are the numbers on this page real?
Example numbers are made up to show how the maths works, and the page says so. A figure only counts as exact when the page says it was calculated on a stated date. Nothing you enter in a calculator leaves your browser.
Can I use this to decide whether to run a bot?
It can show whether a bot's numbers hold together and how much an account can lose. It cannot say what the market will do, and it is not advice. Use it to ask better questions, then read the terms of your own broker or exchange.
Is this financial advice?
No. It is a calculator and general education. It does not consider your situation, and its output is only as good as the numbers you enter.
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