What Is Stop Loss and Take Profit? - Role in Risk and Capital Management

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Placing stop loss and take profit orders on the trading platform helps determine the right time to exit a trade under different market conditions.

When a trade is in profit, a take profit (TP) order is used to exit the market at a favorablelevel. Conversely, when the market moves against the trade, a stop loss (SL) order is triggered to prevent further losses.

There are various methods for calculatingSL and TP levels depending on the trading strategy.