Forex glossary
Take profit (TP)
Documentation context: For standard OTC FX in MT5, the long trigger checks Bid and the short trigger checks Ask; triggering and actual execution depend on the instrument.
A level linked to a position that triggers its closure when the price condition is met. Standard OTC FX in MT5 checks Bid for a long and Ask for a short; reaching the level does not confirm execution or net profit.
Illustrative example
How does it work in practice?
A hypothetical EUR/USD short in standard OTC MT5 has TP at 1.1000 USD per EUR. With bid 1.1000 and ask 1.1002, its TP condition is unmet because closing the short checks ask.
A reward ratio does not create an edge on its own
Stop loss versus take profit
Linear long-position model: 100 units, entry 10 USD per unit, SL 9 USD and TP 12 USD. The figures below exclude costs.
On a narrow screen, the table can be scrolled horizontally.
| Term | What it describes | Shared example |
|---|---|---|
| Stop loss | An adverse-move exit condition; an ordinary stop does not guarantee the loss amount. | Planned −100 USD at 9 USD; an actual 8.80 USD fill gives −120 USD. |
| Take profit (TP) | A favorable-move exit condition; triggering is separate from execution. | Actual closure at 12 USD gives +200 USD of price P/L. |
Takeaway: Order levels describe a plan. Settlement follows confirmed fills, position quantity and assigned costs.
Change an assumption, see the result
What changes if…?
Change Bid and Ask to see the correct closing sides for a long and a short. The model shows an immediate close at unchanged quotes; it does not simulate triggering a TP order.
EUR/USD model: 1 pip = 0.0001. Long: buy at Ask, close at Bid; short reverses the sides. Quotes stay unchanged between entry and exit. No slippage, commissions or swap.
Check your understanding
Select the quote side for a short’s TP and separate the condition from confirmed execution.
Show the answer and explanation
The TP condition is unmet because ask remains above 1.1000.
Closing a short is a repurchase. This model uses ask 1.1002, which has not reached the TP level.
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Related terms
Sources and documentation
- MetaTrader 5: basic trading principles
Orders, deals and positions; FOK, IOC and partial-filling policies.
Document read:
The example illustrates the mechanism. Check current account conditions and instrument specifications with the provider.