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# 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.

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<h2 id="what-is-take-profit">
  What Is Take Profit?
</h2>

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

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<h2 id="what-is-stop-loss">
  What Is Stop Loss?
</h2>

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

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<h2 id="how-tp-sl-works">
  How TP / SL Works
</h2>

* 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.

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<h2 id="setting-tp-sl">
  Setting TP / SL
</h2>

TP/SL can usually be set:

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

Both methods help automate exit strategies.

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<h2 id="tp-sl-vs-liquidation">
  TP / SL vs. Liquidation
</h2>

* 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.

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<h2 id="common-beginner-mistakes">
  Common Beginner Mistakes
</h2>

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

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<h2 id="best-practices">
  Best Practices
</h2>

* 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

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<h2 id="summary">
  Summary
</h2>

On 6MM, TP/SL helps users:

* Automate exits
* Reduce emotional trading
* Manage risk effectively

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