Trading Basics
Take profit explained
Take profit – TP
Quick definition: A take profit is an order that automatically closes your position when the price hits a profit level you set in advance.
Take profits turn paper gains into real gains and keep a price reversal from wiping out your profits.
Many traders take profit in stages: close 50% at the first target, move the stop loss to break-even, and let the rest run.
Take-profit targets should be set so the risk/reward (R:R) ratio is at least 1:2.
💡 Example
📊 Calculate R:R ratio →Long ETH at $3,000, stop loss at 2,900, take profit at 3,200: risk of 100, reward of 200, R:R = 1:2.
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Educational content for reference only, not financial advice. Leveraged trading carries the risk of losing your entire capital.