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Take-profit

a.k.a. TP, Profit target

The hand that snatches your winnings off the table before the market can grab them back.
In plain English

An order that automatically closes your trade at a set price to lock in a profit.

A take-profit order closes your trade once price hits your target. You do not need to be staring at the screen: the broker banks it for you.

It keeps greed in check. Prices that race toward your target can just as quickly turn and run back. Set the target from your plan, and weigh it against your stop-loss using the risk-reward ratio.

Try itDrag, type, poke. Nothing here is real money.
Worked example

Locking in a win

  1. Buy EUR/USD at 1.0850 with a mini lot ($1 a pip).
  2. Take-profit at 1.0910: 60 pips above entry.
  3. If hit: 60 × $1 = $60 profit (before costs).

Bottom line: The trade closes itself the moment price touches 1.0910.

Don’t be that stickman

Setting a target so far away it is almost never reached, or so close it barely covers the spread.

Filed under
Orders and executionRisk management
Related lingo
Stop-lossRisk-reward ratioLimit order

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