However, a similar attitude can also be found in systematic trading. This happens mostly in discretionary trading, where the decision to close trades is made "on the spot" while the trade is running. When a trade is cruising along, it's easy to get caught up in the desire to make even more profit, keeping the position open as long as possible. Second, a Take Profit shields us from one of any trader's greatest enemies: emotion. For many traders, seeing a profit built with patience and perseverance crumble can be even more wearisome than an actual loss. Closing a position and putting a certain profit in your pocket, without having to worry about possible market downturns, is no small advantage. What Are the Benefits of a Take Profit?įirst of all, Take Profit offers a psychological advantage. In this article, we'll see the benefits of a Take Profit, under what circumstances it should be avoided, and in what cases it can be very useful. With a Take Profit, a trader can target a specific profit level and order the trading system to close the position as soon as that threshold is reached. Take Profit is the "positive" twin of Stop Loss. We already talked about Stop Loss, which is an order given to the broker to close a position when a price reaches a previously determined negative threshold.
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