EURUSD 1.1853 USDJPY 111.64 USDCAD 1.2375 EURCZK 26.031 USDCZK 21.956 EURPLN 4.2728 USDPLN 3.6051
EURUSD 1.1853 USDJPY 111.64 USDCAD 1.2375 EURCZK 26.031 USDCZK 21.956 EURPLN 4.2728 USDPLN 3.6051

Start real trading in just 30 minutes

Start real trading in just 30 minutes

Micro-lots with no minimum deposit!

Open demo account MetaTrader5

Open demo account MetaTrader5

Opening demo account is the first step

Demo account in MetaTrader 4

Demo account in MetaTrader 4

All-time trading platform classic

For beginners

For beginners

Learn the basics of financial markets

Take profit orders allow a profit in situations to be secured when the market reaches a new extreme for a short period of time, only to retrace back afterwards

Rule of thumb

Take profit orders allow a financial outcome of a transaction at a predefined level to be secured

 

On the other hand, it may be argued that they limit the potential profits in some situations

The decision to set a Take Profit order is much easier than the stop loss decision. Why  is this so? From  a psychological point of view, this order represents a „positive” scenario. The Take Profit order automatically closes  an open position  at the moment when the market reaches a predefined price level that is more favourable for the investor than the current market price. In other words, execution of the Take Profit order secures the profit (or lower loss) for an open position.

 

The investors use the Take Profit order for many reasons, and some of them are as follows:

  • The trader is expecting that the market will reach a new maximum just for a relatively short period of time, and then fall again to the previous levels. In this case acclimatisation allows the position to be closed just in time .
  • The market remains in  a horizontal trend, as the price keeps oscillating around the current levels. The Take Profit order allows the long position to be closed in the upper part of the market oscillation range (or to close a short position in the lower part).
  • The investor is following some specific trading system that defines a fixed relation between the potential profit (secured by the Take Profit order) and potential loss (protected by the stop loss order).

 

Alternatively one may choose not to use the Take Profit order at all, and this can be because:

  • There is a strong trend on the market and the trader expects that once the price reaches a certain level, the market movement may be continued .
  • The trader is using a trading system that follows trends and bases the moment of closing the position on the execution negative scenario only, using just stop loss orders (for example the long position is closed once the market price falls below its moving average).
  • One simply does not want to limit the potential profits from  an open position.

 

Again, just like in the case of a stop loss order, the decision belongs to the individual investor and should be based upon the experience and the consideration of the situation on the given market. In any case, it is strongly advised to define and follow a risk management strategy when trading. You can find more on this topic in the Risk management section.

Pola oznaczone gwiazdką są wymagane.

zamknij