Definition

A Take-Profit Order is an automated instruction that closes a position when a predefined profit target is reached. It allows traders to lock in gains without continuous monitoring.

Take-profit levels are typically set based on strategy objectives or technical analysis.

Example in Context

A trader buys Ethereum at $2,000 and sets a take-profit order at $2,200. When the price reaches that level, the position is automatically closed.

FAQs

Does a take-profit guarantee execution at the exact price?

Execution may vary depending on liquidity and market conditions.

Can take-profit orders be used with stop-loss orders?

Yes. Many strategies use both simultaneously.

Is take-profit necessary for all trades?

Not required, but commonly used in structured trading systems.

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