{"term":{"slug":"take-profit","term":"Take-Profit","definition":"A pre-set order to close a position at a specified profit target. In prop trading with trailing drawdown, take-profit orders are essential to lock in gains before unrealized profits raise the drawdown floor unnecessarily.","extendedExplanation":"Take-profit strategy in prop trading depends heavily on the drawdown type. With intraday trailing drawdown (Apex), every tick of unrealized profit permanently raises the floor. Not having a take-profit means your drawdown room shrinks as the trade runs in your favor. This creates a paradox where winning trades can actually hurt you if you do not close them.\n\nWith static drawdown (FTMO), take-profit is less urgent because profits genuinely create cushion. You can afford to let trades run with a trailing stop. However, having a take-profit ensures you capture gains rather than watching winners turn to losers.\n\nCommon take-profit strategies for prop firms: fixed R-multiple (e.g., close at 2R or 3R), partial take-profits (close 50% at 1R, remainder at 2R), and structure-based targets (close at the next support/resistance level). Partial take-profits are popular because they lock in guaranteed profit while leaving room for larger gains.","exampleWithNumbers":"Apex $50K with intraday trailing drawdown. You buy 2 NQ contracts. Trade runs up 50 ticks ($500). Floor moves up $500. No take-profit set. Price reverses and you close at 10 ticks ($100). You locked the floor $500 higher but only kept $100 in profit. Net drawdown room lost: $400. If you had a take-profit at 30 ticks ($300), the floor would have only moved $300 and you would have kept $300. Net room lost: $0.","category":"strategy","relatedTerms":["stop-loss","risk-reward-ratio","trailing-drawdown","intraday-drawdown","drawdown-floor"]},"_links":{"self":"https://runvigil.app/api/glossary/take-profit","page":"https://runvigil.app/learn/take-profit","allTerms":"https://runvigil.app/api/glossary","learn":"https://runvigil.app/learn"}}