Take Profit Order

A take profit order is a specific type of limit order that instructs a trading platform to close a position once the asset reaches a specified price. This order is executed automatically, ensuring that the trader captures profit without needing to monitor the market constantly.

It is widely used in both spot and derivatives trading to automate exit strategies. By setting this order, a trader defines their exit point before entering the trade.

This removes emotional bias and ensures execution even during periods of high volatility. If the market price does not reach the specified level, the order remains open.

It is a fundamental tool for executing a preplanned profit taking strategy.