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A take profit is a pending order that automatically closes a position when the price reaches a specified profit target. It locks in gains without requiring you to monitor the trade. Once triggered, a take profit becomes a market order and is filled at the best available price. Using take profit together with stop loss defines the risk-reward profile of a trade.
You buy USD/JPY at 150.00 and set a take profit at 151.00. When the price reaches 151.00, your position is automatically closed, securing 100 pips of profit. This works even if you are away from your screen. Prices in this example are illustrative.
