Algo Trading School

Take profit

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A take profit is the mirror of a stop loss: an exit order at a price better than the current one. When the market touches it, the position closes and the gain is realized without intervention.

The ratio between take-profit distance and stop-loss distance (the reward-to-risk ratio) interacts with win rate: a strategy that wins small and loses big needs a very high win rate to survive; one that wins big and loses small can be profitable while losing most of its trades.

Covered in depth in Lesson 03: Gestión de riesgos antes que nada..

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Lecciones ocasionales y en lenguaje claro sobre trading automatizado — el mismo tono que todo en este sitio. Sin señales, sin promesas; date de baja cuando quieras.

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