Take-Profit Order
A take-profit closes a position automatically at a set profit target, removing emotion from the exit.
A take-profit closes a position automatically at your target price, banking the planned profit. It removes emotion from the exit and pairs with a stop-loss to define risk before entry.
A take-profit (TP) order closes a position automatically when price reaches a specified level in your favour, banking the planned profit. It removes the temptation to hold a winner until it turns into a loser. The typical setup pairs a take-profit with a stop-loss, defining the full risk and reward of the trade before entry.
How It Works
- Executes as a limit order at the target price or better
- Usually set at the same time as the stop-loss, before entry
- Locks in the reward side of your risk-reward ratio
Trading Tips
Set targets at structure: previous highs/lows, measured moves, or key levels
Decide the exit before entry - moving TP mid-trade is how winners become losers
Related Terms
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