A Take Profit order is a type of order set together with Market Execution or Pending orders. It is used to fix profits once the price level reaches a predefined value. Take Profit orders are executed automatically. This review deals with Take Profit orders and teaches you to place them on different platforms, use them in various trading systems, and calculate their levels.
There is Take Profit definition:
Take Profit (ТР) is a pending order that directs the broker to close a trade once the asset's price becomes equal to the value preset by the trader.
Let me explain the Take Profit meaning:
It works as follows: the trader places an order to buy and buys an asset at its current price on the trading platform. He also sets a TP value at the current price + 20 points in the order. Once the price level reaches that value, the trade will be closed automatically. A TP order remains active until the price reaches the preset value.
The trader can place TP orders in the following situations:
In the Forex market, Take Profit orders are always placed above the Bid price for long positions and below the Ask price for short positions.
Attention! There are two prices in the market: Bid — sell price, and Ask — buy price. The Ask price is always higher than the Bid price. Candlesticks are formed as follows:
So, Min Ask will equal Low plus spreads, and Max Ask will equal High plus spreads.
The platform's charts display only the Bid price as a default parameter. Remember to price in spreads when setting your TP order.
A TP market order can work automatically at the preset level without the trader's participation.
How does Take Profit work? Here’s an example. Open the BTCUSD's chart. As our goal is to see a take-profit order example, we'll take a short M5 time frame. Open the order window and set a target profit amount at 5 USD, which corresponds to 43,647.90. Continue reading with Litefinance.com...