A take-profit order sits at your planned target, often a level where you expect resistance on a long or support on a short. On most exchanges it can be a limit order resting on the book or a conditional order that sends a market order when triggered. Many traders scale out with several targets, closing part of the position at each.
Example
Long SOL at $140 with a stop at $134, so R = $6 per SOL. You set two take profits: half the position at $152 (+2R) and the rest at $164 (+4R). If both fill, the average exit is $158 and the trade makes +3R. If price reaches $152, reverses and hits a stop moved to entry, the trade still makes +1R.
Why it matters
Targets turn a plan into orders, which protects you from greed and hesitation once a trade is in profit. They also make risk-reward and expectancy measurable, because you can compare where you planned to exit with where you actually did.
Common mistake
Setting the target by the ratio you want instead of by the market. A 5R target beyond major resistance looks good on paper but rarely fills. Base targets on structure first, then check that the risk-reward still justifies the trade.
Put it into practice
FAQ
- Should a take profit be a limit or a market order?
- A limit take profit fills at your price or better and usually pays the maker fee, but it can be missed if price only touches it. A triggered market order always fills, but pays the taker fee and possible slippage.
- Should take profits be reduce-only?
- Yes. Reduce-only makes sure the order can only close your position and never opens a new one in the opposite direction.
- Is taking partial profits a good idea?
- It smooths results and reduces regret, but it also lowers your average win. Compare both approaches in R on your own trades.