What is Take Profit in Crypto? How to Use TP Orders Effectively
- rachelbeautybar
- Aug 12
- 3 min read
In crypto trading, knowing when to buy and when to sell is just as important as choosing the right asset. One of the most essential tools for locking in profits is the Take Profit (TP) order.
With the global crypto market cap now above $4.1 trillion (Source: CoinMarketCap) and market volatility stronger than ever, having a TP strategy ensures you don’t miss the chance to secure gains before prices reverse.
1. What is a Take Profit Order in Crypto?
A Take Profit order is a limit order set to automatically sell your asset when its price reaches a predetermined level.
Example:
Buy 1 BTC at $100,000
Set Take Profit at $120,000
If BTC reaches $20,000, the system sells automatically, locking in your profit—no manual action required.
Key advantages of Take Profit orders:
Automatic execution: No need to monitor charts 24/7.
Emotional control: Avoid missing the sell point due to greed.
Risk protection: Prevents profit erosion when markets reverse.
2. How Take Profit Orders Work in Crypto
Crypto prices can move thousands of dollars within hours. Without TP, you risk watching profits disappear in sudden downturns.
Step-by-step:
Enter a position: Buy an asset (e.g., BTC) expecting a price increase.
Set a target profit level: For example, +15% above your entry.
Place the TP order: If price reaches your target, the system sells automatically.
Example calculation:
Buy 10 ETH at $3,500 each
Set TP at $4,000
Profit = (4,000 – 3,500) × 10 = $5,000 (minus trading fees, usually 0.1–0.3%).
3. When to Use a Take Profit Order
A. Scalping (Ultra-short-term trading)
TP targets: Small profits (0.5–2%) captured quickly.
Works well in futures or spot with large capital.
Advantage: Fast execution reduces market exposure.
B. Swing Trading (Medium-term trading)
Hold positions for days or weeks.
TP often set near major resistance levels.
Combines chart patterns + indicators like RSI/MACD.
C. Trend Trading (Long-term position holding)
Keep positions during a strong uptrend.
Use partial Take Profit at key resistance points.
Leave remaining position open until trend reversal signals appear.
4. Combining Take Profit with Stop Loss
A dual order strategy helps protect profits while minimizing losses:
Take Profit: Locks in gains when price reaches target.
Stop Loss: Cuts losses if price moves against you.
You can also use a Trailing Stop:
Price rises → Stop level automatically moves up.
Price reverses → Position closes at the trailing stop, securing part of the gains.
5. Using Support and Resistance for TP Placement
Support and resistance levels are key price zones where reversals often happen.
Place TP just below resistance to ensure execution.
Confirm levels with technical indicators (e.g., Fibonacci retracement, RSI).
Consider risk-reward ratios like 1:2 or 1:3 for optimal strategy.
6. Pro Tips for Mastering Take Profit in Crypto
Stick to your plan: Don’t move TP higher due to greed unless the trend strongly supports it.
Backtest your strategy: Use historical data to test TP placements.
Adjust for volatility: Highly volatile coins may need wider TP targets.
Combine with other tools: Use TP alongside Stop Loss, trendlines, and market sentiment analysis.
Conclusion
A well-placed Take Profit in crypto can be the difference between securing gains and watching them vanish. Whether you scalp, swing trade, or ride long-term trends, mastering TP orders will help you protect profits and stay disciplined in volatile markets.
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