What is Take Profit?

Take profit is an order that closes a trade with a profit (as a rule) at a predetermined price level. In other words, an open trade will be closed at a profit when the price reaches a certain ceiling.

In most cases, take profit orders order are used, which realize only part of the profit already made. This is a solution that has many advantages.

One form of action is called take profit targets. In this case, we meet with a grid, i.e. a grid formed by multiple take profit levels, which are set at several levels for a single order. This solution is definitely more recommended than manually setting take profit.

Why? It allows you to secure partial profits, constantly increasing your capital until you reach the desired take profit level.

Take Profit, and the Forex Market

Forex take profit can be executed at two prices – for both long and short positions. It is about take profit bid ask orders, which, similarly to Forex, can be modified, allowing to obtain a take profit sell limit or tp buy limit order.

Take Profit is a type of order that is used primarily in highly volatile markets, where we can expect large fluctuations before reaching key levels, and plan to set our Forex take prodit order.

The order is executed when the price value exceeds a given price level and then returns to it. For example, we will use a take profit buy order with a limit at the moment we want to activate a TP order only after a correction.

Take Profit – setting on MT4 and MT5

The basis for setting a take profit order for both MetaTrader 4 and MetaTrader 5 is to define a main order. It can be both a market order and a pending order.

Defining the Take Profit is done directly in the order sheet, at the time of specifying the price level at which we want to close the order with a profit. However, it is an overall profit and from this level in many cases we do not have the possibility to set the value of the so-called Partial Close, which is a partial take profit.

There are two other ways to determine the take profit value.

The first is the modification of an order, done by right-clicking on it in the MT Terminal window and selecting “Modify” from the context menu.

The second is to set a take profit level for an order, that has already been opened and drag it to the designated level, then drop it. This is the fastest and most convenient way to set a take profit Forex order.

Another option is to use special overlays for MetaTrader, which allow you to very efficiently implement the take profit part scalping, at the moment when it starts to be more effective.

How do I set the take profit level?

Take profit has the advantage that it can be used in several ways. The simplest and by far more effective strategy will be to set take profit levels at key support and resistance levels, which are taken from large time frames.

The basic way to determine the level of take profit is using Price Action, which are determined by local levels of support & resistance, which are located at the border of each swing. These are formed by Lower Lows and Higher Highs.

Another solution is the use of Fibonacci take profit levels, which are determined using the Fibonacci elimination ratio and Elliott wave study. This method is used primarily by position traders, i.e. those who trade once every few days or weeks

You can also use the twin method for chandelier stops, which are described in the article on the use of ATR for trailing stops.

So – is it worth using take profit?

Definitely yes, and any trader will confirm this. In the case of this solution is quite the same as with any other. Properly, thoughtfully used represents a reasonable and thoughtful hedging of activities.