Take Profit

A take profit order automatically closes a profitable position at a predetermined price level, securing gains without constant monitoring. It's the opposite of a stop loss, protecting profits rather than limiting losses. Take profit levels are often set at resistance levels, Fibonacci extensions, measured move targets, or based on risk-reward ratios. While they ensure profits are captured, they can also limit gains if price continues moving favorably. Traders might use partial take profits, scaling out of positions, or trailing stops as alternatives. Proper take profit placement balances securing gains with allowing winners to run.