Takeprofit

Take-profit, often abbreviated as TP, is an order placed by a trader to close a position automatically when the price reaches a specified level of profit. It is used across markets such as forex, stocks, futures, and cryptocurrencies to lock in gains without requiring ongoing monitoring. A take-profit order can be implemented as a limit order or a conditional order, depending on the trading platform.

How it works: A trader sets a TP price that represents the target exit. This can be a specific price level or a percentage gain from the entry. When the market price reaches the TP level, the order executes and the position closes. Some platforms offer trailing take-profit, where the target moves with favorable price movement to capture more upside while preserving gains.

Types and combinations: Fixed take-profit remains at a set level. Trailing take-profit adjusts upward as the price advances, aiming to lock in profits while allowing further upside. Take-profit is often used in conjunction with a stop-loss as an OCO (one-cancels-the-other) order, so that only one exit is triggered and the other is canceled.

Considerations: The TP level should align with risk–reward goals, chart support and resistance, and market volatility. While TP protects upside, it can cap larger profits if the price continues to move in your favor after the target is hit, or if the market gaps beyond the target. In illiquid or highly volatile conditions, slippage or partial fills may occur, and some brokers offer guaranteed take-profit options for a fee.