SL And TP Forex Trading

Take Profit (TP)
A predetermined price level where a trade will automatically close to lock in the profit.
This helps traders to lock in the gains when the market reaches a favorable level.
Example: If you buy EUR/USD at 1.1000 and set a TP at 1.1100, the trade will close automatically once the price hits 1.1100, securing your profit.
Stop Loss (SL)
A predetermined price level where a trade will automatically close to limit losses.
Purpose: It protects traders from losing more money than anticipated if the market goes against their position.
Example: You buy EUR/USD at 1.1000 and set SL at 1.0900. When the price hits 1.0900, the trade will automatically close, limiting your loss.
Key Points
Automation: Both TP and SL are pre-set, so they work even when you are not actively monitoring the market.
Risk Management: They help in disciplined trading by not allowing emotional decision-making.
Customization: The levels for TP and SL depend on your trading strategy, risk tolerance, and market conditions.