A take-profit is an order that automatically closes an open position once a predefined profit target is reached. It is used to secure gains in a planned way and to avoid leaving the outcome of a trade to chance or emotional decision-making. The placement of a take-profit is typically based on technical analysis—such as a resistance level, a Fibonacci target, or a defined distance derived from the risk-to-reward ratio. In combination with the stop-loss, the take-profit forms the framework of a trade plan: the stop-loss limits potential loss, while the take-profit defines the expected profit target. In practice, a minimum risk-to-reward ratio of 1:1.5 or 1:2 is often targeted. In dynamic markets, the take-profit can also be adjusted during the trade—this is referred to as a dynamic take-profit adjustment.
