What Is a Take-Profit Order in Forex?
A take-profit (TP) order closes a position automatically at a pre-defined profit level. This guide explains what TP is, why it matters, how to place it effectively, and practical methods for setting TP using support & resistance, Fibonacci, and ATR, plus partial take-profit strategies and platform steps on MetaTrader.
Department
Research & Education
Category
Forex Trading
Author
One Trading Markets Academy
What Is a Take-Profit Order in Forex?
The name is mostly self-explanatory, but you might still ask: What’s the benefit of TP? How is it set? How do you use it efficiently?
To be consistently successful in FX trading, you must master money management—reducing risk while maximizing potential returns. New traders spend huge effort finding “the best” trades—analyzing markets, identifying trends, and picking currency pairs. It’s right to plan how and when to enter, but it’s just as important to know how to exit with the largest rational gain. This article covers the other side of the risk/reward equation: the take-profit order.
A take-profit order (TP) is used across financial markets to lock in gains by closing your position automatically when price reaches a pre-set profitable level. In essence, TP defines how much profit you want on the position you’re opening (or already opened).
Example: if you buy 1 lot EUR/USD at 1.2246, your TP would be a sell of the same 1 lot at a higher price than entry (accounting for broker spread).
TPs are almost always paired with a stop-loss (SL), which limits loss if price moves against you. TP helps ensure you keep profits when price moves in your favor. You can express TP as pips or as a percentage of entry.
For example, if you estimate USD/JPY may rise 15% and that move occurs, you’d want to exit and move on. You could place TP at +15% above market and SL at −5% below market to cap loss. Here you risk 5% for a 15% potential gain—risk/reward 5:15, which is acceptable.
Why Setting Take-Profit Matters
By defining TP you gain freedom—you don’t have to watch charts all day; the order triggers automatically once the market allows it. Of course, a TP can cap upside: FX prices may overshoot your level and the position would have closed early, before the full move.
In FX, TP and SL are, above all, risk-management tools and must not be set randomly. Treat every trade individually, choosing a risk/reward you expect before entering. Experienced traders often use partial take-profit to increase realized gains and reduce opportunity cost—we’ll detail that below.
Placing tighter TPs is more justified in weak/slow markets to secure gains on smaller moves. In high-volatility markets, the opportunity cost of early exits can be large, so avoid rushing to set a constrained TP.
Risk-to-Reward Theory for TP Placement
After defining the most logical stop-loss level(s), turn to finding a reasonable return and the risk/reward ratio for your trade. You must ensure a good reward relative to risk; if the data suggests otherwise, the trade isn’t worth it. So first determine the most logical SL, then set the most logical TP.
If the resulting risk/reward is acceptable, the trade is likely worthwhile. Be honest—do not ignore major market levels or obvious obstacles to force a “satisfying” ratio. Use proper TP/SL pairing and analyze market conditions, structure, support/resistance, key turning points, swing highs/lows, and other critical elements.
Ask: is there a level that makes TP logical, or a barrier that blocks the path to a fair profit?
There is no single formula for the “best” TP—it depends on your risk appetite and strategy. One rule stands: never set TP randomly. Align your decision with technical analysis. For each trade, research market context, volatility data, and chart patterns to validate your view that price can reasonably reach your target.
Most traders set TP using support and resistance. These are zones where price typically stabilizes. The simplest way to draw support is to mark at least two swing lows and connect them; price commonly bounces from support.
For short (sell) positions, place TP a few pips above support (and consider the spread), avoiding an exact hit on the level.
For long (buy) positions, place TP a few pips below resistance. To draw resistance, connect at least two swing highs.
While support/resistance are reliable, don’t rely on them alone. Use complementary tools such as Fibonacci levels to confirm the target path.
Methods for Setting Take-Profit Levels
We now know what TP is and where it’s used. Unlike a trailing stop-loss, a trailing take-profit can be acceptable but may reduce gains at times due to paying the spread multiple times. So how do you set TP correctly in MetaTrader?
1) TP at Support & Resistance
Depending on your trading style, you can use different strategies to place TP. The simplest and most effective is often to place TP at major S/R levels derived from higher timeframes (H4, D1, W1).
For day traders, those levels may be too far; many rely on price action around Fibonacci levels (via Fibonacci retracement and Elliott wave tests). This method is especially popular for traders who hold positions several days to a week, where Fibonacci often works with higher precision.
2) TP with the ATR Indicator
This is a specialized approach using ATR (Average True Range) with a moving/adjusted TP. You shift the TP according to ATR so the position stays with the trend, avoiding premature exits and often capturing strong breakouts as TP reaches the maximum ATR value. This suits advanced traders with solid market knowledge and works best in trending markets where S/R sit at volatility boundaries formed by higher lows and higher highs (or the inverse in downtrends).
3) TP at Fibonacci Levels
Another common way to set TP in MetaTrader 5 is using Fibonacci—also useful in commodities and indices markets.
Placing TP on MetaTrader (MT4/MT5)
Placing TP in MT4 is straightforward. You can set TP for any open position or pending order. Either define SL and TP in the New Order window at entry, or set them after opening the trade (recommended at entry for protection). You can modify TP from the Trade tab (right-click → Modify or Delete Order) or directly on the chart by dragging the TP line.
Setting TP When Opening the Trade
Define TP at the moment of entry by specifying the exact price level where you want to close the position in profit—this is a full (fixed) TP. From here you can’t execute partial exits automatically with a single line; visually, TP sits above entry for buys and below entry for shorts.
Setting TP After Opening the Trade
Setting TP After Opening the Trade
Two ways:
Drag the entry line on the chart with the left mouse button to your desired TP level and release—the quickest method. (Drag up for buys, down for sells.)
From the Trade window, double-click the T/P cell (or right-click → Modify or Delete Order) and enter the TP price.
Partial Take-Profit in Your Trades
As noted, partial TPs are a more advanced concept used by experienced traders. If you’re new, stick to fixed TP or test your approach in an OTM demo account. With partial TP, traders predefine multiple TP levels—often derived from tested S/R—to both secure gains early and reduce position size if price reverses. The trade-off is that if price runs, total profit can be smaller than holding full size to one target (due to multiple spreads and scaling out).
Common partial-TP methods:
50/50 Method – Set two TP points; close half at TP1 and half at TP2. Move SL to breakeven once TP1 hits to protect gains.
Triple-Scale (Three-Stops) Method – Use three TP points with the position split into three parts. Close part one at TP1, part two at TP2 (and move SL to TP1 to make the trade risk-free), and the final part at TP3—the extended target. This secures profits while riding the trend.
80/20 Method – Ideal in volatile or uncertain conditions. Use two TPs: TP1 at the most likely support/resistance, TP2 further in the trend direction. Close 80% at TP1 and 20% at TP2. If price fails to extend, most profit is already banked; if it reaches TP2, overall return increases.
Tips to Improve Your TP Strategy
Keep your strategy consistent; change it only when reliable data justifies it.
Set TP using trusted methods, not arbitrary values.
Use price alerts to avoid constant chart-watching.
Experiment (demo) with multiple TP levels; trial & error helps you find what fits your style.
Methods for Setting Take-Profit Levels
We now know what TP is and where it’s used. Unlike a trailing stop-loss, a trailing take-profit can be acceptable but may reduce gains at times due to paying the spread multiple times. So how do you set TP correctly in MetaTrader?
1) TP at Support & Resistance
Depending on your trading style, you can use different strategies to place TP. The simplest and most effective is often to place TP at major S/R levels derived from higher timeframes (H4, D1, W1).
For day traders, those levels may be too far; many rely on price action around Fibonacci levels (via Fibonacci retracement and Elliott wave tests). This method is especially popular for traders who hold positions several days to a week, where Fibonacci often works with higher precision.
2) TP with the ATR Indicator
This is a specialized approach using ATR (Average True Range) with a moving/adjusted TP. You shift the TP according to ATR so the position stays with the trend, avoiding premature exits and often capturing strong breakouts as TP reaches the maximum ATR value. This suits advanced traders with solid market knowledge and works best in trending markets where S/R sit at volatility boundaries formed by higher lows and higher highs (or the inverse in downtrends).
3) TP at Fibonacci Levels
Another common way to set TP in MetaTrader 5 is using Fibonacci—also useful in commodities and indices markets.
Placing TP on MetaTrader (MT4/MT5)
Placing TP in MT4 is straightforward. You can set TP for any open position or pending order. Either define SL and TP in the New Order window at entry, or set them after opening the trade (recommended at entry for protection). You can modify TP from the Trade tab (right-click → Modify or Delete Order) or directly on the chart by dragging the TP line.
Setting TP When Opening the Trade
Define TP at the moment of entry by specifying the exact price level where you want to close the position in profit—this is a full (fixed) TP. From here you can’t execute partial exits automatically with a single line; visually, TP sits above entry for buys and below entry for shorts.
Setting TP After Opening the Trade
Two ways:
Drag the entry line on the chart with the left mouse button to your desired TP level and release—the quickest method. (Drag up for buys, down for sells.)
From the Trade window, double-click the T/P cell (or right-click → Modify or Delete Order) and enter the TP price.
Partial Take-Profit in Your Trades
As noted, partial TPs are a more advanced concept used by experienced traders. If you’re new, stick to fixed TP or test your approach in an OTM demo account. With partial TP, traders predefine multiple TP levels—often derived from tested S/R—to both secure gains early and reduce position size if price reverses. The trade-off is that if price runs, total profit can be smaller than holding full size to one target (due to multiple spreads and scaling out).
Common partial-TP methods:
50/50 Method – Set two TP points; close half at TP1 and half at TP2. Move SL to breakeven once TP1 hits to protect gains.
Triple-Scale (Three-Stops) Method – Use three TP points with the position split into three parts. Close part one at TP1, part two at TP2 (and move SL to TP1 to make the trade risk-free), and the final part at TP3—the extended target. This secures profits while riding the trend.
80/20 Method – Ideal in volatile or uncertain conditions. Use two TPs: TP1 at the most likely support/resistance, TP2 further in the trend direction. Close 80% at TP1 and 20% at TP2. If price fails to extend, most profit is already banked; if it reaches TP2, overall return increases.
Tips to Improve Your TP Strategy
Keep your strategy consistent; change it only when reliable data justifies it.
Set TP using trusted methods, not arbitrary values.
Use price alerts to avoid constant chart-watching.
Experiment (demo) with multiple TP levels; trial & error helps you find what fits your style.
Trading With Take-Profit — The Bottom Line
Every trade is essentially a business decision. Evaluate the risk and reward, then decide if it’s worth taking. In FX, think about potential drawdown and realistic profit given current market conditions. To trade more profitably, it’s wise to use both stop-loss and take-profit.
By placing TP orders you limit downside by locking profits and you force yourself to maintain a disciplined plan. For best results, define TP and SL based on market structure—never randomly. Always seek confirmation from two or three tools (e.g., S/R, ATR, Fibonacci) and follow the price action. Risk management is an inseparable part of trading.
You should now be able to distinguish where to set TP on future trades and understand the range of strategies available to implement it.
