Take Profit and Stop Loss orders are Associated Pending Orders that are designed to either close your position while on profit or protect you from undesired losses.
You can set both orders in the Profit/Loss tab which appears after you click on the field of your open position. You can either choose to set the target price of the orders or specify the target result that you wish for your position to be potentially closed on.
Here's how you can use 'Take Profit' and 'Stop Loss' Orders to your CFD trading:
Its purpose is to close your position and secure a profit if the traded instrument’s price goes in the desired direction. Take Profit can be used for both long “Buy” positions and short “Sell” positions. If your position is long 'Buy", you can place a 'Take Profit' at the desired distance above the current market price to close the position once its target level has been hit or surpassed.
You can do the same with a short "Sell" position. If you place the Take Profit order at a price lower than the current one, your position will be automatically closed once the set price has been reached in a downward movement.
The role of Stop Loss Orders is to close and prevent your position from going into big losses should the market price go in the undesired direction. Similarly to the Take Profit orders, Stop Loss orders can be set for both long and short positions, but in the opposite direction. For long “Buy” positions, the Stop Loss target price is below the traded instrument’s price, while for short “Sell” positions, the target price is above the current price.
Essentially, Take Profit Orders are Limit Orders and Stop Loss Orders are Stop Orders designed to close your position. They are named the way they are on the CFD platform so that a distinction is made between them and the Entry Pending Limit and Stop Orders.
You can associate either one of or both of the orders to the same position.
N.B. During rapid market movements, it is possible for the price to gap and surpass the Stop Loss target price. In such cases, the Stop Loss Order will be executed at the first available price, resulting in a greater loss for the position.