Trading
Take-Profit
An order type that automatically closes a trading position when the price reaches a specified profit target, locking in gains without manual intervention.
Last updated: January 5, 2025
What is a Take-Profit Order?
A take-profit (TP) order automatically closes your position when the price reaches your target profit level. It’s an essential risk management tool that ensures you capture gains without having to monitor the market constantly.
How Take-Profit Works
- Enter position: Buy or sell cryptocurrency
- Set TP level: Specify your target price
- Price reaches target: Order executes automatically
- Position closes: Profit locked in
Example (Long Position)
- Buy BTC at $65,000
- Set take-profit at $70,000
- If BTC reaches $70,000: Position closes automatically
- Profit: $5,000 per BTC (7.7%)
Setting Take-Profit Levels
Consider these factors:
- Support/resistance levels: Technical analysis
- Risk/reward ratio: Aim for at least 2:1
- Volatility: Higher volatility = wider targets
- Trading timeframe: Day traders vs. swing traders
Take-Profit Strategies
Fixed Percentage
- Set TP at consistent % gain
- Example: Always take profit at 10%
Multiple Take-Profits
- TP1: Close 50% at 5% gain
- TP2: Close 50% at 10% gain
Trailing Take-Profit
- Moves with price
- Captures additional upside
Take-Profit vs Stop-Loss
| Feature | Take-Profit | Stop-Loss |
|---|---|---|
| Purpose | Lock in gains | Limit losses |
| Trigger | Price above entry | Price below entry |
| Outcome | Profit realized | Loss minimized |
Most exchanges like Binance and Kraken support TP/SL orders.
Ready to Start Trading?
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