Take Profit

A take profit order is used by forex traders to specify the exact rate or number of pips from the current price point in which to close out their current position for a profit. The rate considered to be the level where the trader wants to take a profit is sometimes referred to as the take-profit point.

As the name suggests, take profit orders are used to lock in profits in the event the rate moves in a positive direction. For example, if you are long on a currency pair position and believe the price will rise to a certain level, but are uncertain what it will do beyond that level, placing a take profit order at that point will automatically close out your position allowing you to lock in a profit.

For example, if you buy a currency for $6 with a take profit order of $8, the currency will be sold when it reaches $8.