TP and SL Forex Set up

Take Profit (TP)
Definition: A pre-set price level where a trade automatically closes to secure a profit.
Purpose: It helps traders lock in 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)
Definition: A pre-set price level where a trade automatically closes to limit losses.
Purpose: Saves the trader from losing huge amounts if the market goes in his or her direction.
Example: If you buy EUR/USD at 1.1000 and set an SL at 1.0900, the trade will automatically close when the price falls to 1.0900, limiting your loss.
Key Points
Automation: TP and SL are set prior, so they work even when you are not checking the market.
Risk Management: They help maintain disciplined trading by limiting emotional decision-making.
Customization: The levels for TP and SL depend on the trading strategy, risk appetite, and market conditions.