Take Profit
Take Profit — A pre-set price at which a winning position is automatically closed to lock in gains.
- Quick definition: A pre-set price at which a winning position is automatically closed to lock in gains.
- Category: Order Types
Full Definition
Take profit (TP) closes a winning position at a defined target. The risk-reward ratio is the take-profit distance divided by the stop-loss distance — most pro strategies aim for 1:2 or higher (lose $1 to make $2). Without a TP, traders often watch winners turn into losers as they hold "for more" and the market reverses.
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