How it works
It can turn an exit plan into an automatic instruction and can be useful when the trader cannot monitor the market continuously.
What to check
Check whether the order is a limit-style instruction and which side of the quote determines execution. Spreads can affect whether a visible chart price actually triggers the order.
- Choose the target before the trade
- Know the trigger side
- Review whether the target fits the strategy
Limits and risks
An automatic profit target can also exit a position before a larger move develops. It is a risk-management choice, not a method for predicting the best possible exit.
Primary sources
BIS 2025 Triennial Central Bank Survey↗FCA: Contracts for difference (CFDs)↗General information only. Investment products can lose value, and terms, fees and regulation can change.