Take profit

A take profit is an order that closes a position when the price reaches a target in your favour. It locks in a gain at a level chosen before the trade, instead of leaving the exit to the moment's emotions. For a long position the target sits above the entry; for a short, below.

Ways to set a target

• In R: a multiple of the trade's risk, the distance between entry and stop loss. A target of two R aims to win twice what the trade risks.
• In percent from the entry price.
• At a fixed price, or at a level taken from the chart.

Single or partial

A single take profit closes the whole position at one target. Partial take profit closes it in parts, each at its own distance, and leaves the rest to the stop loss, a trailing stop or an exit rule. Partial exits bank some profit early while letting part of the position run.

On Algonney a strategy uses either a single take profit or parts, not both. In live trading, partial take profit runs only on Bybit USDT perpetuals, where the exchange-side stop loss follows the position after each partial exit. On other live markets a strategy with partial take profit is refused.

Trade-offs

A close target is hit more often but wins less each time; a far target wins more but is hit less often. Fees matter too: a very close target can be eaten by trading costs. Backtesting shows how a target behaves on real history.

Related: stop loss, R-multiple and Trailing stop bot. See also Automated crypto trading bots.