Take profit is the second protective order when opening a trade. It fixes the profit when it reaches the specified level and opens a reverse buy or sell order.
Take profit allows you to set a target for each trade if the price moves in the direction you calculated.
Some traders believe that ‘take profit’ limits their profit in general and does not allow them to earn even more if the price movement continues and the order is already closed.
But we remember that cryptocurrency trading is 90% out of 100% an unpredictable process. Therefore, in our case, it is better to earn less than not earn at all.
When setting Take profit, follow a few rules:
Always place it at a price better than the market price: when buying - above the current, when selling - below
Take profit near strong resistance/support levels (this will eliminate the possibility that it will be hit on a strong breakout).
The amount of possible profit must be at least 1.5 times greater than the amount of possible loss.
Take profit is not a strictly necessary order, but it is better to open it if you work on a short timeframe (scalping or intraday trading).