A take profit order automatically closes an open order when the price reaches a specified threshold.
It is an order used by currency traders to automatically close their position once a certain profit has been made.
Although it halts any further advance in profit, it guarantees a specific profit after a level has been hit.
Take-profit orders are used to lock-in profits.
For example, if you are long USD/JPY at 110. 50 and you want to take your profit when the rate reaches 111.00, you will set this rate as your take-profit level.
If the bid price touches 111.00, the open position is closed automatically securing your profit.
Trades are closed at the current market rate, but in a fast-moving market, there may be a gap between this and the take-profit rate you had set.
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