Crypto glossary
Take-profit order
A take-profit order is an instruction that closes a position automatically once the price hits a target, locking in a gain without watching the screen.
A take-profit order is the mirror image of a stop-loss. The trader sets a target price above the entry for a long position, or below it for a short one, and the exchange closes all or part of the position when the market reaches it. Depending on the platform it executes as a limit order or as a market order.
Exchanges and perpetual futures platforms usually let traders attach a take-profit and a stop-loss to the same position, a pair often labelled TP/SL; when one of them fills, the other is cancelled. Many traders set several take-profit levels to sell a position in stages rather than trying to pick the exact top.
The cost of a fixed target is that a strong trend can run far beyond it after the position is closed. Targets near obvious resistance levels are crowded, and a price that falls just short never triggers the order. Fees and funding keep accruing until the position is closed.
Example
A trader opens a long on ETH at 3,000 dollars with a take-profit at 3,300; if ETH touches 3,300, the position closes automatically with a gain of about 10% before fees.
