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

Play Free Games On RosiMosi
  • Math

  • High School

  • 12th grade

  • Calculus and Advanced Math Concepts

  • English

Author's Instructions

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.