Orders & Positions

Take Profit / Stop Loss (TP/SL)

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Take Profit (TP) and Stop Loss (SL) are automated orders designed to help traders lock in profits and limit losses without constantly monitoring the market.

On 6MM, TP/SL is a core risk management tool for U-margined perpetual contracts.

What Is Take Profit?

Take Profit automatically closes your position when the price reaches a predefined favorable level.

Purpose:

  • Secure profits
  • Avoid emotional decision-making
  • Execute exits even when you are offline

Example:

  • You open a long position at 20,000
  • You set TP at 20,600
  • When the price reaches 20,600, the position is closed automatically

What Is Stop Loss?

Stop Loss automatically closes your position when the price moves against you.

Purpose:

  • Limit maximum loss
  • Protect account balance
  • Prevent liquidation in volatile markets

Example:

  • You open a long position at 20,000
  • You set SL at 19,600
  • If the price drops to 19,600, the position is closed

How TP / SL Works

  • TP/SL orders are conditional orders
  • They are triggered when the mark price or last price reaches the trigger level (depending on configuration)
  • Once triggered, they execute as a market order or limit order

Execution behavior may vary based on partner settings.

Setting TP / SL

TP/SL can usually be set:

  • When opening a position
  • After a position is already open

Both methods help automate exit strategies.

TP / SL vs. Liquidation

  • TP/SL closes positions before margin becomes critical
  • Liquidation occurs when margin is insufficient
  • Using SL reduces liquidation risk

TP/SL is a proactive risk control tool, while liquidation is a system-enforced mechanism.

Common Beginner Mistakes

  • Setting SL too close to entry price
  • Ignoring market volatility
  • Not accounting for fees and slippage
  • Forgetting to set TP or SL

Best Practices

  • Always set Stop Loss before or immediately after opening a position
  • Use Take Profit to avoid over-holding positions
  • Adjust TP/SL as the market evolves
  • Combine TP/SL with low leverage

Summary

On 6MM, TP/SL helps users:

  • Automate exits
  • Reduce emotional trading
  • Manage risk effectively

Using TP/SL is essential for disciplined perpetual contract trading.