🎯 Mastering Exit Strategies: How TP1 and TP2 Change the Game

Many people focus on where to enter trading — but the real art lies in skillful exit. If you’ve ever come across a signal like “Buy $XRP 0.540 – 0.545, TP1: 0.552, TP2: 0.561, SL: 0.532,” and wondered how exactly to utilize it, this guide is for you.

What are really TP1 and TP2?

Take Profit levels are pre-determined price points where a trader decides to realize gains. The two-tier system (TP1 and TP2) is no coincidence — it’s a strategy for managing market uncertainty.

TP1 is a conservative target — easier to reach, serving as the first safety barrier. TP2, on the other hand, is a more ambitious goal — requiring greater patience and carrying higher risk, but offering proportionally larger profits. Some traders even add TP3 in strong trends, but that’s an advanced level.

Why not exit after TP1?

The market can be unstable. Sometimes, the movement accelerates after reaching the first target and continues upward. If you close the entire position too early, you’ll miss a significant part of the potential profit. On the other hand, waiting without safeguards exposes your already earned money to the risk of a sudden reversal. TP1 and TP2 are solutions — they allow you to achieve a balance between capitalizing and safety.

Practical application in real conditions

Imagine you invest $300 based on a signal with two targets. An optimal split is:

• 50% of the position at TP1 — close the first phase, neutralize part of the risk
• Remaining 50% at TP2 — maintain exposure for larger moves

Of course, you can adjust the proportions: aggressive traders might choose 30% at TP1 and 70% at TP2, while more cautious traders prefer 70% and 30%.

The professionals’ trick: moving the Stop Loss

After reaching TP1, many experienced traders move the stop loss to the entry level. This means the remaining trade is practically risk-free — if the price drops, you still keep the profits from the first target. It’s an elegant protection against unexpected market reversals.

Common pitfalls

The first is closing everything at TP1 — a volatile market often continues to rise beyond that level. The second is patiently waiting for TP2 without safeguards — the earned money can turn into losses in a second. The third, and hardest to fix, is a lack of discipline in managing the stop loss, which can wipe out all gains with one unexpected move.

Case study: Practice on $SOL

Suppose the signal indicates: buy SOL between $145–$147, TP1 at $151, TP2 at $158, and a stop loss at $141. You invest $500.

Action plan: sell half ($250) upon reaching TP1, realizing profit. Move the stop loss to the entry level. Wait for TP2 with the other half, using a trailing stop if the trend continues.

This structure combines the safety of quick scalping with the potential of a longer move.

The right approach is discipline

Most traders focus on entry. Professionals think about exit. TP1 and TP2 are not tools for speculation — they are mechanisms for emotional control, realizing profits at the right moment, and allowing winners to grow. Trade strategically, and your results will reflect your discipline.