Lesson 5. What Is Take Profit?
Take Profit is a pending order that automatically locks-in a trader’s profit.
When to use Take Profit:
- Let’s imagine you want to leave a trade open a for a few hours and cannot be constantly monitoring the price movement. In this case, you simply place a Take Profit order and rest assured whilst you head off to watch a movie.
- Let’s imagine that whilst you are watching the movie the asset’s price moves in a favorable manner. A Take Profit order placed in advance will lock-in your gain by automatically closing your position, once the asset reaches a favorable rate, so you make a profit whilst you watch your movie.
Here is an example of how to place a Take Profit order:
- You open a EUR/USD buy trade at 1.0620
- You invest $500 with a multiplier of 100
- Check the chart for the asset’s price most recent peak. In our case, it’s 1.0745.
- Your Take Profit order should be placed just below the maximum price, at approximately 1.0725
- To place a Take Profit order for this quote, first open a trade with the asset and then go to My Trades
- Select the EUR/USD trade you have just opened and click on it
- Select Quote from the Stop Loss/ Take Profit menu
- In the Take Profit field, set your desired value, 1.0725 in our case, and click on Save
Now you don’t have to worry about the asset’s price changes nor will you have to spend hours monitoring your charts. When your target profit level has been reached, your trade will close automatically, and your earnings will be immediately deposited to your trading account. Enjoy the popcorn and watch that movie.