Take Profit (TP) and Stop Loss (SL) are essential risk management tools in trading. They help traders control potential losses and lock in profits without constantly monitoring the market. Setting SL or TP allows you to remotely manage your orders and plan your trading strategy ahead.
Stop Loss (SL) and Take Profit (TP) must be set at a minimum distance from the current market price. This distance varies depending on the instrument. You can check the required distance in MetaTrader by navigating to: Market Watch > Right-click on the instrument > Specification > Stops Level.
Take Profit (TP)
A Take Profit order automatically closes your position when the price reaches a specified level of profit. This helps you secure gains at your target price without manual intervention.
- Example: If you buy EUR/USD at the current price of 1.1000 and the Stop Level for this instrument is 10, you can set TP at 1.1010 or above. You can set TP at 1.1050, for example, and your trade will close when the relevant execution price reaches the TP level.
Stop Loss (SL)
A Stop Loss order is used to automatically close your position when the market moves against you and the Stop Loss condition is triggered. It is an important risk-management tool that can help limit losses and protect your account from significant drawdowns.
- Example: If you buy EUR/USD at 1.1000 and set SL at 1.0950, your Stop Loss will be triggered when the applicable market price reaches the specified level.
Why Can My Stop Loss Execute at a Different Price?
The Stop Loss price is a trigger condition, not necessarily the final execution price.
If the market gaps, moves rapidly, or there are insufficient executable quotations, your position may be executed at a different price after the Stop Loss is triggered. This may happen when the available market price moves past the Stop Loss level before the order can be executed.
For example, if you set a Stop Loss at a particular price and the market moves directly beyond that level, the actual execution price may be different from the price you specified.
When checking whether a Stop Loss was triggered, you should also distinguish between bid and ask prices, depending on the order direction. Do not determine whether a Stop Loss was triggered based only on a single price shown on a chart.
If you have questions about Stop Loss execution, provide the following information so our team can review the order according to the applicable rules:
- Order number
- Stop Loss setting
- Relevant time before and after the trigger
- Execution record
An ordinary Stop Loss should not be regarded as a guarantee that losses will never exceed a certain amount.
For more information about slippage, execution speed, order delays, and technical issues, see Understanding Slippage, Execution Speed, and Technical Issues.