A take profit is an order that closes a position once the price reaches a pre-set favourable level. Used together with a stop loss, it fixes both ends of the trade before entry, so the outcome is known in advance in pips and in money. Deciding the level should be part of the plan rather than a reaction to watching the price move.
Forex glossary
Take Profit
Related term
Risk-Reward Ratio
The risk-reward ratio compares what a trade risks to what it targets, usually written as something like 1:2 where the take-profit distance is twice the stop-los…
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