Take-profit order

A take-profit order automatically closes a position once the price reaches a target level, locking in a gain. If you buy ether at $3,000 and set a take-profit at $3,600, the exchange will sell when that price is reached.

Take-profits are usually set together with a stop-loss so that a trade has a planned exit in both directions. Many exchanges let you attach both when you open the position; when one triggers, the other is cancelled, an arrangement known as OCO (one cancels the other).

Planning exits in advance helps remove emotion from trading, since greed and fear often lead people to hold winners too long or sell too early. A common approach is to take profits in stages, selling part of a position at several targets. Traders also think in terms of risk-reward ratio: a trade risking ₹1 to make ₹3 has a ratio of 1:3, so it can be profitable even if many trades lose.