Order Type

Take Profit

An order to automatically close a position at a specified price to lock in profits.

Definition

A take profit (TP) order automatically closes a position when price reaches a predetermined profit target. It helps traders lock in gains without needing to monitor positions constantly.

How It Works

Set above entry for long positions
Set below entry for short positions
Triggered when price reaches target
Often used with stop loss for risk:reward ratios

Trading Tips

Set at key resistance (longs) or support (shorts)

Consider multiple take profit levels

Aim for positive risk:reward ratios (e.g., 1:2, 1:3)

Related Terms

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