Take Profit
A predefined price where a winning trade is closed automatically.
Also called: tp · profit target · target
In plain language
A take profit is a resting limit order at the level where you believe the move is likely to run out. It removes the decision from the moment when greed and fear are loudest.
Its placement should be based on where price is genuinely likely to stall — a prior high, a range boundary, a measured move — rather than on a round profit number.
The target, paired with your stop, defines the trade’s risk/reward ratio. A target too close to the entry can make an otherwise good setup mathematically not worth taking.
Seen on a chart
Why it matters
The distance to your target relative to your stop determines what win rate you need to break even. Setting targets carelessly means taking trades whose math never worked.
Common mistakes
- Picking a target because it is a round dollar amount rather than a real level.
- Setting targets so far away that they are almost never reached.
- Taking profit early on winners while holding losers to the full stop, which quietly inverts your risk/reward.
Put it to work
Keep exploring
These concepts are connected. Understanding one usually makes the next one easier.
A predefined exit that closes a losing trade before the loss becomes serious.
How much you stand to gain compared with how much you stand to lose on a trade.
The price at which you close a position, whether at a profit or a loss.
A stop loss that follows price in your favor and never moves back against you.
An order to buy or sell at a specified price or better — it may not fill at all.