# Take Profit/Stop Loss Orders

**Take Profit (TP) orders** are utilized to automatically close a position and secure profits once the market price hits a predetermined level:

* Long Positions: above the entry price
* Short Positions: below the entry price

Conversely, **Stop Loss (SL) orders** are employed to automatically close a position and limit losses once the market price reaches a preset level:

* Long Positions: below the entry price
* Short Positions: above the entry price

## How should the TP/SL orders be set?

|                 | TP                                                                                                               | SL                                                                                                                                                                                                                                                                                      |
| --------------- | ---------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Long Positions  | Place it at a price level **higher than the entry price** where you intend to close the trade and secure profits | <p>Place it at a price level </p><ul><li><strong>Lower than the entry price</strong> to close the trade and prevent additional losses, and </li><li><strong>Higher than the liquidation price</strong> to prevent liquidation rather than simply closing the position.</li></ul>        |
| Short Positions | Place it at a price level **lower than the entry price** where you intend to close the trade and secure profits  | <p></p><p>Place it at a price level </p><ul><li><strong>Higher than the entry price</strong> to close the trade and prevent additional losses, and </li><li><strong>Lower than the liquidation price</strong> to prevent liquidation rather than simply closing the position.</li></ul> |


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