Definition of Take-Profit

What is take profit? Take profit is a fixed order to sell a security after it reaches a profit level. Selling with take profit means ensuring that the trader will make a profit from the trade. Take profit orders are made by traders to maximize their profits. It sets the price above the purchase price chosen by the trader. If the price of a security has exceeded the limit, it will automatically trigger a sell, on the other hand, if the price cannot exceed the limit, then the order will not be forwarded. Take profit orders are a useful short-term trading strategy for day traders who want to take advantage of the rapid increase in the cost of securities to make immediate profits. This is a type of limit order where even though a limit order can be used to buy securities at a low price (low price) or even sell them at a high price (high price). 

 

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apa itu take profit
Definition of Take Profit

Once the take profit point is reached on the shares owned by the trader, the order is triggered and also the sale is made at the market value that is at that time. However, if the point is not reached, then the sale is most likely not possible, and the trader in this case will hold the security.

Important Notes


Take profit is often used in conjunction with a stop loss. This is the same standing order that can trigger a sell-off when the price of a security drops to a certain level. This can minimize or stop the losses experienced by traders. 

The Right Time To Take Profit Forex


Take profits are most effective with short-term strategies, you can exit the market as soon as you have reached your profit target and without letting those profits disappear on the next downturn. Take profits can also pay off when you trade against the trend because the prevailing trend will continue over time. Every trader should know how to place take profit, here are some strategies on how to use take profit.

Strategies Using Take Profit

  1. Support And Resistance

Resistance and support levels help you in setting a good take profit. That is why this strategy is important and most popularly used among forex traders. Support and resistance can be raised not only with horizontal lines as a sign to mark the presence of highs and lows, but it can also be raised with trend lines and channels as well as points from pivots and Fibonacci.

  1. Daily Range Levels

Daily range levels are another way to recognize a good level of take profit. The true range average or ATR indicator will help you do that The ATR will measure the volatility that a currency pair experiences over a specific period and time. This will give the average of the movement and also show the number of pips that the pair anticipates to keep moving. Find the value of the take profit indicator when you are about to enter a trade. Then add a value to the entry price and you will get a level to place your take profit. Keep in mind that, there are a lot of factors that affect the price over the course of three days and the ATR shows a cross-sectional movement, but the actual ones can also be different. 

  1. Chart Pattern

There are many types of chart patterns that suggest specific target levels that can be used as a place to take profits. Many chart patterns have a projected target from the entry level to the trade direction (it goes down when you sell, and it goes up when you buy). Targets are often equal to the size of the pattern, so level 3 is where traders place take profits. It also applies to triple tops, triple bottoms, head and shoulders, rectangular etc. 

  1. Using Risk Ratio

When you decide to take profits, it means that you must also consider the risk ratio. This measure helps you show how much profit the trader is anticipating in exchange for a limited risk of loss. In general, the best ratio is to use 1:3 so the profits should be 3 times greater than the losses. For example, if your stop-loss is equivalent to 50 pips, then your TP should be 150 pips. In some cases, other risk ratios are also possible. For example, if you are trading on a breakout level, then you can use a 1:5 ratio as this will allow for high false breaks so you may be more protective of yourself. 

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