Glossary
Take-profit
An order that closes a position at a set profit level. It fixes the target before the trade, for example at 2 R.
A take-profit is an order that closes a position when price reaches a chosen profit level. It turns the target into a rule instead of a decision made under pressure. A long position is closed at the bid and a short one at the ask, so a short's target fills only when the ask reaches the level, not just the bid shown on most charts.
Example
You buy gold at 4,000.0 with a stop-loss at 3,992.0, a risk of 8.0 USD per ounce. A take-profit at 4,016.0 sits 16.0 USD away, which is +2 R. If it fills, the result is +2 R before costs; if the stop fills first, −1 R. With a 2 R target, any win rate above 33.3% covers the losses before costs.
Why it matters
The target and the win rate are linked. A distant take-profit fills less often; a close one fills more often but earns less per win. Test the two together, after costs.