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Take Profit
A pre-set order that closes a winning position automatically once price reaches a defined target.
What it is
Take Profit (TP) is the mirror of stop loss: a pre-set exit on the WINNING side. It removes greed from the decision — you set the target before the trade and the order executes mechanically. Professional traders use a TP LADDER: 50% of the position out at TP1, 30% at TP2, 20% at TP3. This locks in profit while leaving runners on the table. The placement of TP levels should respect previous swing highs/lows, round numbers, and the asset's typical move size (measured by ATR). Setting TPs too close = small wins, never let trades work; too far = trades round-trip back to break-even.
Example
Entry $2,100 ETH, stop $2,058. TP1 at $2,142 (close 50%), TP2 at $2,184 (close 30%), TP3 at $2,247 (close 20%). ETH runs to $2,150 — TP1 hits, half the position is profit. Price retraces to $2,058 (stop hit on remainder) — but the trade is still net-positive because TP1 secured profit early.
How Indikora uses Take Profit
Indikora's Trade Plan auto-generates a 3-level TP ladder for every signal, anchored to swing highs and ATR. Position size is split 50/30/20 by default.
Related terms
- Stop Loss — A pre-set order that closes a losing position automatically once price reaches a defined level.
- Risk/Reward Ratio (R:R) — The ratio of potential loss (to stop) versus potential gain (to target) on a single trade.