What are Profit Targets?
A profit target is a predetermined point at which an investor will exit a trade in a profitable position. Also called take profit levels, they are part of many trading strategies that investors and technical traders use to manage risk.
Example of Profit Targets
Looking at the daily chart of XLM (Stellar) we can see 4 TP levels, all marked out in order: TP1-4. On the Easy Loot signal that this chart was sent out, the take profits looked a little like:
TP1 🎯 $0.14158
TP2 🎯 $0.16247
TP3 🎯 $0.27767
TP4 🎯 $0.30406
How to Identify Levels to Take Profit
Take profit levels (TP) are identified along well-known levels of resistance. On an uptrend, take profit levels go hand in hand with zones of distribution and resistance levels.
By identifying either a resistance level or a zone of distribution, traders can get a good sense of where to take profits and what price the market is going to see a pullback down to.