Should I always use a take-profit order?

A stop-loss is essential; a take-profit order is a choice. Trend followers often exit with a trailing stop and no fixed target. If you cannot watch the screen, though, a take-profit order makes sure the exit happens while you are asleep or at work. Whichever you choose, the exit rule must be decided before you enter.

How many pips should I set for take-profit?

There is no fixed number. A sensible target depends on the pair, the timeframe and how far price normally moves. Thirty pips may be a full day on a quiet pair and an hour on a volatile one. Read the target from the chart or from the ATR, then check that it is large enough compared with your stop.

Can I set take-profit and stop-loss at the same time?

Yes. On MT4, MT5 and most other platforms you can attach both to an order when you place it, or add them to an open trade later. They work as a pair: when one is hit, the position closes and the other disappears with it. Setting both at entry is a good habit because it removes later hesitation.

Why was my take-profit not hit when price touched it?

The usual cause is the spread. Charts normally show the bid price, but a sell trade closes at the ask, which is higher by the spread. The chart can touch your level while the ask never does. Spreads also widen around news and at the daily rollover. Setting sell targets slightly above the level reduces the problem.

Take-Profit Strategies: When and Where to Exit a Winning Trade

Intermediate8 min read

When should you take profit in forex?

Take profit at a price you chose before entering, based on where the market is likely to stall: the next support or resistance level, a measured pattern target, a multiple of your risk or a normal day’s range. Deciding in advance matters more than the method, because exits chosen in the moment are driven by fear and greed.

A take-profit is an order that closes a winning trade automatically at your target price. Its partner, the stop-loss, closes a losing trade. Stop placement and trailing mechanics are covered in stop-loss strategies. This guide deals with the profit side.

Why exits decide your results

Two traders can enter the same trade at the same price and finish with different results. One closes after 15 pips (a pip is the smallest standard price step). The other holds for 60. The entry only starts a trade. The exit sets the size of your average win, and your average win, together with how often you win, decides whether you make money. Most traders spend nearly all their study time on entries, so a clear exit rule is often the cheaper improvement.

How to set a take-profit from the chart

These three methods read the target from price itself.

Next support or resistance level. Support is an area where price has bounced before; resistance is an area where it has turned down. If you buy at 1.1000 and the next resistance is 1.1080, put the target a few pips in front of it, say 1.1075, because price often turns just before an obvious level. See support and resistance.
Measured move from a chart pattern. Measure the height of the pattern and project it from the breakout point. A range between 1.0950 and 1.1050 is 100 pips high. If price breaks above 1.1050, the measured target is 1.1050 + 0.0100 = 1.1150. The guide to chart patterns applies the same idea to double tops and head-and-shoulders shapes.
Fibonacci extension. An extension projects a finished swing beyond its end. The common levels are 127.2% and 161.8%. If price rose from 1.1000 to 1.1100, pulled back and turned up again, the 127.2% extension is 1.1000 + 127.2 pips = 1.1127 and the 161.8% extension is 1.1162. They are most useful at new highs or lows, where the chart offers no older level to aim for. The guide to Fibonacci retracement shows how to draw the swing.

Take-profit by numbers: R-multiples, ATR and time

Fixed R-multiple. R is the amount you risk. With a 30-pip stop, a 2R target is 60 pips: buy at 1.1000, stop at 1.0970, target at 1.1060. It is simple and easy to test, but it ignores the chart. If strong resistance sits 40 pips away, a 60-pip target is a hope. The stop-loss and take-profit calculator turns pip distances into exact prices.
ATR multiple or average daily range. The Average True Range (ATR) measures how far price normally moves per candle. Suppose the daily ATR is 80 pips and price has already risen 55 pips from the day’s low when you buy. A 25-pip target stays inside a normal day. A 100-pip target needs a day nearly twice the normal size. A swing trader, who holds for days, might use a multiple such as 2 × ATR from entry. See the ATR indicator guide.
Time-based exit. Close the trade at a set time if neither stop nor target has been hit: the end of your session, before a major news release, or before the weekend. A day trade that has gone nowhere by the close has lost its reason to exist. Use a time exit alongside a price target, not in place of one.

Scaling out: what partial profits really do

Scaling out means closing part of the trade at a first target and leaving the rest for a second. A common version closes half at +1R and half at +2R. It feels safer, but look at the sums. If the trade reaches 2R, you earn (0.5 × 1) + (0.5 × 2) = 1.5R, not 2R. If it reaches 1R and then falls back to your stop, you earn (0.5 × 1) − (0.5 × 1) = 0R, not −1R.

Take ten trades: four lose outright, two reach 1R and then fail, and four reach 2R.

All out at 2R: (6 × −1R) + (4 × 2R) = +2R
Half at 1R, half at 2R: (4 × −1R) + (2 × 0R) + (4 × 1.5R) = +2R

The totals match. Scaling out gives up 0.5R on every full winner to save 1R on every trade that reaches 1R and then fails. It only comes out ahead when those failed trades number more than half of the full winners. It raises your win rate, lowers your average win and makes the ride smoother. It does not create an edge, meaning a real advantage, by itself.

Trailing stop vs take-profit: which suits which market?

A fixed target has a ceiling: you can never earn more than the target. A trailing stop, which follows price and closes the trade when price turns back, has no ceiling but always hands back part of the move.

Trending markets favour trailing. A trend makes higher highs and higher lows, or the reverse. When price runs a long way in one direction, a fixed 2R target leaves most of the move behind.
Ranging markets favour fixed targets. A range keeps turning at the same two areas. A trailing stop gives the profit back at every turn, while a target just inside the range edge gets filled.
Unsure? Split it. Take half at a fixed level and trail the rest.

Moving the target: greed and fear

Greed extends. Price nears your target, looks strong, and you drag the target further away. Price then turns at the level you first identified, and the profit shrinks or vanishes.
Fear cuts. One candle goes against you and you close at +0.7R on a 2R plan. Do it often and your average win no longer covers your losses; the guide to the risk-reward ratio shows the sums.

The fix is a rule written before the trade. The target may only change on a condition you set in advance, such as “if a 4-hour candle closes beyond the level, switch to a trailing stop”.

Spreads: which price triggers your take-profit?

Every pair has two prices: the bid, where you can sell, and the ask, where you can buy. The gap between them is the spread. A buy trade opens at the ask and closes at the bid. A sell trade opens at the bid and closes at the ask. Most platform charts, including MT4 and MT5 by default, draw the bid price.

For a buy, this is simple: when the chart touches your target, the bid is there and the order fills. For a sell, the take-profit needs the ask to reach it, and the ask sits above the chart price by the spread. With a target at 1.0950 and a 1.5-pip spread, the chart must fall to about 1.09485 before you are filled. Price can touch 1.0950 on the chart, bounce, and leave you unfilled. So on sell trades, set the target above the level by the spread plus a pip or two. Typical spreads are listed in the independent broker comparison.

Build the exit rule into your plan and test it

Write the exit as one clear rule in your forex trading plan. Then test it. Run the same entries through a backtest, a replay of your rules on past prices, with two or three different exit rules. Compare total R, win rate and the worst losing run. In your journal, note how far each trade went in your favour before it closed. If most winners run far past your target, consider trailing part of the position. If many trades come close to the target and then turn, the target is slightly too far. The method is set out in backtesting and keeping a trading journal.

No exit method can make a losing strategy profitable, and no target is sure to be reached. A take-profit does not protect you either: only a stop-loss limits the downside, and even that can slip in fast markets. Forex and CFDs carry a high risk of loss. Only risk money you can afford to lose.