Take-Profit
Order Types
What it means
A pending order to close your position at a profit once price reaches a set level. It locks in gains without you needing to watch the screen.
Example
You buy at $100 and set a take-profit at $110. When price hits $110, the order sells automatically, banking a $10-per-share gain.
Mistake beginners make
Beginners move their take-profit higher as price approaches it, "letting winners run" with no plan -- then price reverses and the win evaporates. A target is a decision, not a wish.
Related terms
- Stop-Loss — A pending order to close your position at a loss once price hits a set level. It caps how …
- Break-Even — Moving your stop-loss up to your entry price so the trade can no longer lose money. It pro…