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Take Profit (TP)
Definition: A pre-set price level where a trade will automatically close to secure a profit.
To lock in a gain when the market gets to a favorable level.
Example: If you buy EUR/USD at 1.1000 and set a TP at 1.1100, the trade will automatically close, locking in the profit when the price reaches 1.1100
Stop Loss (SL)
Definition: A pre-set price level where a trade will automatically close to limit losses.
Purpose: It saves the trader from high losses if the market goes against his position.
Example: You buy EUR/USD at 1.1000 and place a stop-loss at 1.0900. In this case, when the price hits 1.0900, the trade will automatically close and save you from loss.