Take Profit

A take-profit (TP) order automatically closes your trade when price reaches a predetermined profit target. If you buy EUR/USD at 1.0850 and set a take-profit at 1.0950, your position closes with 100 pips of profit the moment that level is hit — no need for you to be watching.

Setting take-profit levels involves a mix of technical analysis and risk-reward calculation. Common approaches include placing TP at the next resistance level (for longs) or support level (for shorts), using a fixed multiple of your stop-loss distance (2x or 3x risk), or using Fibonacci extension levels to project potential move targets.

There's an ongoing debate about whether to use take-profit orders at all. Some traders prefer to trail their stop-loss and let winning trades run as far as possible, only exiting when the market reverses enough to hit the trailing stop. Others find that not using TP leads to watching winners reverse into losers. The right approach depends on your strategy and temperament — but having some form of exit plan is non-negotiable.