> ## Documentation Index
> Fetch the complete documentation index at: https://faction.trade/docs/llms.txt
> Use this file to discover all available pages before exploring further.

# Take profit and stop loss

> Protect gains and limit losses with TP/SL orders attached to your positions.

Take profit (TP) and stop loss (SL) are automated exit orders that close your position when the price reaches a target level. They help you manage risk without watching the market constantly.

## What they do

* **Take profit** — closes your position at a profit when the price reaches your target
* **Stop loss** — closes your position to cut losses when the price moves against you

## Setting TP/SL on a new trade

When placing a new order, toggle the **TP/SL** section in the trade panel to expand it. You can set:

* **Take profit price** — the price at which you want to lock in your gains
* **Stop loss price** — the price at which you want to exit to limit your loss

Both are optional. You can set one, both, or neither.

## Adding TP/SL to an existing position

If you already have an open position:

<Steps>
  <Step title="Go to the Positions tab">
    Open the **Positions** panel at the bottom of the trade page.
  </Step>

  <Step title="Click the TP/SL button">
    Each position row has a TP/SL indicator. Click it to open the edit dialog.
  </Step>

  <Step title="Set your levels">
    Enter your take profit and/or stop loss prices and confirm.
  </Step>
</Steps>

## Best practices

* **Always set a stop loss** — it is your safety net against unexpected moves
* **Use a minimum 1:2 risk/reward ratio** — if your stop loss is $50 away from entry, your take profit should be at least $100 away
* **Do not move your stop loss further away** — this increases your risk. If anything, tighten it as the trade moves in your favor
* **Account for volatility** — setting a stop loss too close to your entry may cause you to get stopped out on normal price fluctuations

<Tip>
  A good rule of thumb: set your take profit at least 2x the distance of your stop loss. This means you can be wrong more often than you are right and still be profitable overall.
</Tip>