TP and SL Most Forex

Take Profit (TP)
Definition: A predetermined price level at which a trade automatically closes to obtain a profit.
Purpose: Aids the trader in locking profit when the market hits a positive level.
Example: You have bought EUR/USD at 1.1000 and you have set your TP at 1.1100, then the trade will automatically close when the price reaches 1.1100, locking your profit.
Stop Loss (SL)
Definition: A predetermined price level at which a trade automatically closes to limit the losses.
Purpose: It safeguards traders from significant losses if the market turns against their trade.
Example: Suppose you purchase EUR/USD at 1.1000 and put in a stop-loss order at 1.0900. When the price falls to 1.0900, the trade is automatically closed and your loss is capped.
Key Points
Automation: The trade will automatically be closed as both TP and SL are set beforehand, even when the trader is not actively checking the market.
Risk Management: They help to trade with discipline, thereby curbing emotional decisions.
Customization: The levels depend on your risk tolerance, and market conditions because they differ by trading strategy.