Take profit

A take profit is an order that automatically closes a trade in profit when price reaches a level you set in advance.

How it works

You set the price where you want to bank the profit in advance. When the market gets there, the position closes by itself, even while you sleep. A take profit usually works as a limit order, so it fills at your price or better.

The target is not random: it goes where price may stall, just before the nearest resistance on a buy or before support on a sell. Together with the stop-loss, the take profit sets your risk-to-reward ratio (R:R) before you enter.

Many traders split the position: close part at the first target and manage the rest with a trailing stop. That way some profit is locked in and the chance of a bigger move stays open.

Example with numbers 1

You buy BTC at 60,000 USD, stop at 58,500 (1,500 risk), take profit at 63,000 (3,000 target). The risk-to-reward is 1:2. If price reaches 63,000, the trade closes without you.

Example with numbers 2

You sell EUR/USD at 1.0900. The nearest support is 1.0820, so you set the take profit slightly above it at 1.0825: price often turns before touching the level itself.

Common mistake

A common mistake is placing the take profit exactly on a level or a round number. Lots of other orders sit there, and price often turns a few pips short. Put the target a little before the level. The second mistake is moving the target further when price is almost there: greed often turns a winner into a loser.

Questions and answers

What is a take profit in simple terms?

It is a price you set in advance where the trade closes in profit on its own. You lock in the gain even if you are not watching the chart.

How do I set a take profit correctly?

Place it just before the nearest strong level and check that the potential profit is at least 1.5–2 times the risk to your stop.

What is the difference between take profit and stop-loss?

A take profit closes the trade in profit at the target; a stop-loss closes it at a loss to cap the damage. They are often placed together, for example with an OCO order.

Stop-loss Risk/Reward (R:R)Limit order OCO order Trailing stop

Take profit

How it works

Questions and answers

Related terms

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