A take-profit is a fixed target order that closes the position when a pre-defined price is reached. A trailing stop is a moving stop that locks in unrealized gains without capping the upside. Take-profit = defined exit, trailing stop = open-ended exit with safeguard.
| Criterion | Take-profit | Trailing-Stop |
|---|---|---|
| Exit price | Fixed in advance | Result of market movement |
| Caps profit? | Yes | No |
| Protects gains on reversal? | Yes, but only up to the target | Yes, continuously trailed |
| Best for | Mean-reversion, clear target zones | Trend trades with open extension |
| Expected-value profile | Higher hit rate, capped R | Lower hit rate, open R |
When the chart shows a clear target zone (resistance, Fibonacci extension, range boundary) and discipline outweighs maximization.
When no clear target exists and the position should ride an established trend for as long as possible.
Educational content, not investment or tax advice. Neutrally contrasted, not a recommendation of either approach. Trading leveraged products carries risk of total loss.