How to find the optimal value at which to place the take profit is a question that does not have a clear answer. After all, much depends on each futures trader’s risk appetite and trading strategy. One thing remains true, take profits should not be set in random mode. Always accompany your decision with a technical analysis of the market.
For each trade you have to look for relevant information such as market structure, volatility data and suitable chart patterns . All this information is necessary to confirm your feeling that the price of the currency pair is going to move towards a certain level.
There are several elements to follow to define take profit. Most traders place their take profit using support and resistance lines . Instead, support and resistance lines are areas towards which prices stabilize. The easiest way to identify the support line is to identify on the analyzed chart at least two lowest levels and draw a line between them.
In general prices tend to rebound once the support level is reached. For a sell order, the take profit is placed a few take Profit targets above the support. The difference in profit between the take profit and the support level takes into account the spread and, in general, it is safer to avoid setting the take profit at the exact level of the support.
Conversely, for a buy order, the take profit must be placed a few pips below the resistance line. To draw the resistance line it is necessary to identify at least two highest levels.
Even if the resistance line and the support line are reliable elements to define the optimal values of the take profit, you should not rely on them alone.