A Take Profit order (T/P) is a type of limit order that allows a trader to specify the exact price at which to close an open position in order to make a profit.

Although it stops any further advance in profit, it guarantees specific profit after a level has been reached. By using this feature if the market reaches that level you know the order will be closed with profit.

Example: You have an open Buy Order at 231.00. you anticipate the price level will reach 10pips higher at which point you would be happy to take the profit, you set your Take Profit at 241.00 which means when that price is reached your order will be closed by the Take Profit Order - make a cup to tea! no need to be glued to the PC, if you set your basics there is no stress!

TIP:

Buy order the TP is placed above the current market price

Sell order the TP is placed below the current market price

Taking profits is extremely important when trading. After all, you only make money when you actually close the position. Practice this on a Demo Account!