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Take Profit (TP)
- Definition: A pre-set price level where a trade will automatically close to secure a profit.
- Purpose: 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 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 close automatically if the price drops to 1.0900, limiting your loss.