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Take Profit (TP)
Definition: A predetermined level of price at which the trade will automatically close to earn a profit.
Purpose: It assists the trader to lock in gains when the market hits a favorable price level.
Example: Assume you buy EUR/USD at 1.1000 and set a TP at 1.1100. The trade will automatically close once the price hits 1.1100, locking in the profit.
Stop Loss (SL)
Definition: A predetermined level of price at which a trade will automatically close to limit losses.
Purpose: Protects traders from excessive losses if the market moves against their position.
Example: If you buy EUR/USD at 1.1000 and set an SL at 1.0900, the trade will automatically close if the price reaches 1.0900, limiting your loss.
