What is take profit
A take profit (TP) is an order attached to an open position. It closes the trade automatically when price reaches a level you set in your favour. It locks in a gain without you watching the screen.
It is the opposite of a stop loss, which closes the trade at a level against you. Most traders set both when they open a position, so the exit is planned before the trade starts.
A take profit does not make a trade profitable. It only decides where you leave if price gets there. Leveraged forex and CFD trading can lose money fast, and many positions hit the stop loss before the target.
How a take-profit order triggers
The trigger depends on the direction of the trade (long and short) and on bid and ask prices:
| Position | TP placed | Closes when |
|---|---|---|
| Buy (long) | Above entry | The bid price reaches the TP level |
| Sell (short) | Below entry | The ask price reaches the TP level |
The spread is the gap between bid and ask (what is spread). It matters here. On a short trade, the chart usually shows bid prices, so the chart can touch your TP line while the ask has not reached it yet. That is why a sell TP sometimes looks "missed".
A TP works like a limit order: it asks for your price or better. If the market gaps through the level, the fill comes at the first available price. For a TP that is often better than the level, but execution rules depend on the platform and instrument. See slippage for details.
How to set take profit
In MetaTrader and similar platforms you can enter a TP price in the order window when you open a trade. You can also add or move it later by changing the open position. A TP can be removed at any time.
Common ways traders choose the level:
- Structure. Just before a previous high (for a buy) or low (for a sell), or a level where price reversed before. Traders often place the TP slightly inside that level, because orders cluster there.
- Volatility. A distance based on how far the instrument usually moves in the holding period (volatility).
- Risk multiple. A distance set as a multiple of the stop-loss distance (see the R-multiple section below).
- Time. No fixed TP. The trader closes manually at the end of a session or day (trading sessions).
None of these methods is correct by default. Test them on a demo account before using real money.
To see what a planned TP means in money, enter the instrument, direction, lot size, entry price and TP price in the calculator below. It returns the result in pips and in account currency:
Fill in the empty fields to see the result.
For the formula behind it, see profit and loss calculation.
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Partial take-profits
A partial take profit closes only part of the position at a first target and leaves the rest running. A standard TP field closes the whole position. To exit in parts you usually either:
- open several smaller positions, each with its own TP, or
- close part of the volume manually when price reaches your level (partial close).
Traders often pair this with moving the stop loss on the remaining part, or with a trailing stop.
There is a trade-off. Partial exits smooth results, but they also reduce the gain on trades that run far. Use the calculator for each part, with the volume of that part as the lot size, and add the results.
R-multiple framing
Experienced traders often measure targets in R. R is the initial risk: the money lost if the stop loss is hit.
- Reward-to-risk = distance from entry to TP ÷ distance from entry to stop loss.
- Result in R = actual profit or loss ÷ initial risk.
To get both in money, run the calculator twice with the same entry and lot size: once with the TP price as the exit, once with the stop-loss price. Divide the first result by the second.
The break-even win rate is the share of trades you must win to cover losses before costs:
Break-even win rate = risk ÷ (risk + reward)
A distant target lowers the win rate you need, but price reaches it less often. A close target is hit more often but needs a higher win rate. Spread, commission and swap reduce every result, so include them (total cost of a trade). For position sizing and wider rules, see risk management.
Frequent questions
What is take profit in simple words?
It is an order that closes your trade automatically at a chosen price in your favour, so the gain is taken without manual action.
Is a take profit guaranteed to fill at my price?
It asks for your price or better. In fast markets or gaps the fill can differ from the level. Rules depend on the platform and instrument.
Why did price touch my TP on the chart but the trade stayed open?
On a sell position the TP triggers on the ask price, while charts usually show the bid. The spread explains the gap.
Do I need both a stop loss and a take profit?
They do different jobs. A stop loss limits the loss. A take profit fixes the exit for a gain. Many traders set both and plan the ratio between them.
Can I change a take profit after opening a trade?
Yes. In MetaTrader you can modify or remove the TP on an open position at any time while the market is open.