Take Profit / Stop Loss (TP/SL)
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.
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