Risk management · Intermediate

Take Profit Placement Strategies

A 1-minute lesson from the MarketPro academy, one of 22 in risk management.

Last reviewed by the MarketPro research desk · Editorial policy

Short answer

Deciding where to take profit is just as much a risk decision as deciding where to place a stop loss, since it determines how much of a favorable move a trade actually captures. Closer targets tend to be reached more often but capture smaller moves, while farther targets are reached less often but can capture larger moves when they work.

Deciding where to take profit is just as much a risk decision as deciding where to place a stop loss, since it determines how much of a favorable move a trade actually captures.

Common Approaches

  • Fixed target: a predetermined distance or ratio relative to the stop, decided before entry
  • Structure-based target: placing an exit near a nearby support or resistance level where price has previously reacted
  • Partial exits: closing a portion of the position at one level while letting the remainder run toward a further target

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Not investment advice. Past performance is not indicative of future results.