Risk Management
Take Profit
An order to automatically close a position at a target price to secure gains.
Full Definition
A take profit order automatically closes your position when price reaches your predetermined profit target. It helps lock in gains and removes the emotional decision of when to exit a winning trade. Take profit levels are often set based on risk-reward ratios, technical analysis targets, or key price levels.
Example
You buy EUR/USD at 1.1000 with a 50-pip stop loss at 1.0950 and a 100-pip take profit at 1.1100. This gives you a 1:2 risk-reward ratio. When price hits 1.1100, your position closes automatically with 100 pips profit.
Related Terms
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