eToro Take Profit

Written by Nick Zelver

Fact checked by Wikitoro Team

Updated Mar, 2024

eToro's online investment platform includes a crucial trading tool known as the Take Profit feature or TP for short. This tool is especially beneficial for traders as it enables automatic closure of a position once a predetermined profit level is reached.

If you're unfamiliar with this trading command and eager to learn more, this guide will provide a comprehensive overview of how to utilize the TP order on eToro, along with additional personal insights I've shared that could be beneficial for your trading strategy.

What is the Take Profit Order?

The Take Profit (TP) order on eToro is designed to automatically close a trade at a specified price level, allowing you to secure profits for a particular position.

Consider this scenario:

Imagine you've invested in gold at a price of $55. You set a Take Profit order on eToro to close your position if the price reaches $60 or higher. If the price of gold climbs to $60.01 the following day, eToro's platform will automatically close your position, and the profits will be credited to your account.

It's important to note that while the Take Profit order is set to close the trade at your specified price level, execution depends on market liquidity. This feature is particularly useful as it eliminates the need for constant market monitoring and manual position closure at your desired price. However, be aware that in volatile market conditions, Take Profit orders may not execute at the exact specified price level.

Setting and Adjusting Take Profit Levels

For someone who is new to this feature, I wondered how do I set a take profit order on eToro? To effectively use the TP feature on the platform, it's essential to understand how to set and adjust these levels. Here's a step-by-step guide:

1. Open a Position: First, open a trading position on the platform. Select the financial instrument you wish to trade, decide whether to buy or sell, and determine the trade amount.
2. Access 'Edit Trade': Go to the "Portfolio" section of your account. Find the trade you want to set a TP level for and click on the "Edit Trade" button.
3. Specify the TP Level: In the "Take Profit" section, input the desired profit level for closing the position. You can set this as a specific price or as a percentage of your trade value.
4. Confirm Your Settings: Review the TP level to ensure it's correctly set. Once you're satisfied, confirm by clicking the "Set Take Profit" button.
5. Monitor Your Trade: Keep an eye on your position to see if the market price hits your TP level. If it does, the platform will automatically close the position, securing your profits.

Remember: While setting a TP level is a proactive step, it doesn't guarantee profit due to potential rapid market changes. Regularly monitor and adjust your TP level or manually close the position if needed.

Changing the Take Profit Level

So can you modify the TP level on after already opening a position? The good news is that yes, it's entirely possible to adjust this and here's how you can do it:

1. Edit Trade: Go to your "Portfolio", find the relevant trade, and click on "Edit Trade".
2. Adjust the TP Level: In the "Take Profit" tab, modify the TP level to your new target. You can set this as either a specific price or a percentage.
3. Reconfirm the Adjustment: Double-check the new TP level for accuracy. Once you're sure it's correct, confirm the adjustment by clicking on "Set Take Profit".

Setting TP on Pending Trades?

Can I set a take profit order on eToro pending trades? I actually though about this, whether it's feasible to apply a TP order to a trade that has not been executed yet. Based on my practical experimentation with the platform, it appears that doing this isn't directly possible, but here's a workaround:

1. Open the Trade First: Via the platform, the TP function becomes available only after a trade has been opened. This means you cannot set a TP order on a trade that is still in the pending status.
2. Adjusting Your Strategy: If you have a pending market order and wish to include a TP setting, the approach is to cancel the existing pending order.
3. Reinitiating the Trade: Once you've canceled the pending order, you can place a new trade. This time, ensure you set the desired TP level as you open the trade.

But What If the Price Never Reaches the TP Level?

When using this risk management tool on the platform, it's crucial to know what happens if the market price never reaches your set Take Profit (TP) level:

• Open Positions: If the market price doesn't hit your TP level, your position remains open. It will only close when you manually intervene or if a different price level, like a stop loss, is triggered.
• Reassessing Your Strategy: In cases where the market isn't moving as anticipated, consider revising your TP level or implementing a stop loss to minimize potential losses.
• Market Monitoring and Analysis: Stay vigilant about market trends. Employ technical or fundamental analysis to make informed decisions about when to close your position, whether to secure profits or to curtail losses.

Fee Implications of Using the Take Profit Tool?

While the platform doesn't impose specific fees for using the TP feature, be mindful of the general fee structure:

• Spreads: This is the cost difference between the buying and selling price (bid and ask) of an asset. Spreads are incorporated into the price when you open and close a position.
• Overnight Fees: Also known as rollover fees, these are charged for maintaining a position open overnight. The fees vary based on the asset and the level of leverage applied.

Understanding these fees is vital for effective trading. They play a significant role in the overall cost of your trading activities, especially when utilizing features like Take Profit or even Stop Loss.

Take Profit vs Stop Loss: What's the Difference?

Take Profit and Stop Loss are essential risk management tools that are available on the platform and each serve a distinct purpose:

• Take Profit (TP): This feature enables traders to set a specific profit target for their trades. When the asset's price hits the predetermined level, the trade is automatically closed, securing the profits. This tool is particularly useful for locking in gains and preventing potential losses if the market turns against your position.
• Stop Loss (SL): In contrast, SL is designed to cap potential losses. By setting a Stop Loss level, traders instruct the platform to automatically close the trade if the asset's price falls to a certain level. This helps in mitigating the risk of substantial losses, especially in volatile markets.

Key Differences

Below are the notable differences of the TP and SL orders:

It's crucial for traders to understand that while these tools are highly beneficial, they are not foolproof. Market conditions can affect their execution, and traders should regularly review and adjust their strategies as needed.

Locking in Partial Profits with Take Profit?

Yes, eToro's TP feature can be strategically used to secure partial profits. By setting the TP order at a specific price level, you can arrange for only a part of your position to be sold when that price is reached. This approach allows you to realize some gains while keeping the rest of your position active, potentially benefiting from further market movements.

Verifying Execution of Your TP Order

To confirm whether your TP order has been executed, you should:

1. Check Order History or Trade Log: Your order history or trade log on the platform will display all executed trades. Once the market hits your specified TP price, the order will be executed, and this will be reflected in your eToro trading log.
2. Review Account Balance or Portfolio Value: An executed TP order will result in a change in your account balance or portfolio value. The partial profits from the executed TP order will be added to your account, which you can verify by checking these sections.

Endgame

And that's how it's done! Based on how I've explored the TP order, I could conclude that it is indeed an invaluable tool for automatically closing a position when a certain profit level is achieved.

However, I strongly recommend to exercise diligence and regularly monitor your investments, especially open positions, to effectively utilize this feature. Remember, while TP can help in securing profits, staying informed and adaptive to market changes is key to successful trading.

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.

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