Investopedia

Continue to Site »

Profit Target

Filed Under » , , ,
Dictionary Says

Definition of 'Profit Target'

A predetermined point at which an investor will exit a trade in a profitable position. Profit targets are part of many trading strategies that technical traders use to manage risk. Before an investor enters a trade, he determines a profitable exit point at which he will sell out of the position. Traders establish profit targets to avoid letting emotion take over a trade. A profit target can be expressed as a dollar amount or as a percentage return.
Investopedia Says

Investopedia explains 'Profit Target'

The opposite of a profit target is a stop loss point – a price point at which an investor exits a trade that has experienced a predetermined level of loss in order to avoid losing even more. Some investors use chart patterns to determine their entries, stops and profit targets. They look for patterns, such as triangles and head and shoulders, that make it easy to identify these three points.

Articles Of Interest

  1.

    Revenue Projections Show Profit Potential

    Examining how a company makes money can offer clues about its earnings potential.

  2. Trade On Support For The Best Exit Strategy

    Find your sound exit strategy based on support and resistance levels, while understanding the psychology behind them.

  3. A Look At Exit Strategies

    Setting appropriate exit points should help you avoid taking premature profits or running losses.

  4. Target Prices: The Key To Sound Investing

    Learn how to evaluate the legitimacy of target prices and why investors should trust these over ratings.

  5. Patience Is A Trader's Virtue

    Waiting may be the biggest key to reeling in that trophy investment.

  6. Maximize Profits With Volatility Stops

    Find out which type of volatility stop fits your trading objectives.

  7. Interpreting A Company's IPO Prospectus Report

    Learn to decipher the secret language of the IPO prospectus report - it can tell you a lot about a company's future.

  8. After A Big Recovery Rally, It's Up To Renew Blue For Best Buy

    Investors have bought Best Buy's story, but this quarter shows that a lot of work remains to be done

  9. Market Summary For May 17, 2013

    The U.S. stock markets moved sharply higher this week, on track for its fourth straight week of gains, driven by ongoing improvements in economic indicators.

  10. Behavioral Bias - Cognitive Vs. Emotional Bias In Investing

    We all have biases. The key to better investing is to identify those biases and create rules to minimize their effect.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  2. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  3. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  4. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  5. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  6. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.
Trading Center