A take profit is an order attached to an open position that closes it when the market reaches a specified price in your favour. It is the mirror of the stop loss, and like the stop it is set in advance so that the decision to bank a gain is made before the trade is opened rather than while it is running.
Targets expressed in risk
The most useful way to describe a target is as a multiple of the distance to the stop, called R. A trade with a 50-pip stop and a 100-pip target has a 2R target. Expressing exits in R makes it possible to compare trades of different sizes and to reason about the relationship between the target and the win rate.
That relationship is fixed by arithmetic. With a 1R target, a strategy needs to win more than half its trades to make money before costs. With a 2R target it needs to win more than a third. With a 3R target, more than a quarter. Larger targets are hit less often, so a strategy with a high win rate and small targets and a strategy with a low win rate and large targets can have exactly the same expectancy. Neither is better in principle. What matters is which one the market actually pays.
Other ways to exit
A trailing stop moves the stop loss up behind a rising price, locking in part of the gain and letting the trade run until the market turns by a set amount. It replaces a fixed target with an open-ended one and tends to produce a few large winners and many small ones.
A breakeven stop moves the stop to the entry price once the trade has moved a set distance in profit, so that the trade can no longer lose.
A time exit closes the trade after a set number of bars regardless of price, on the reasoning that if the expected move has not happened by then, the idea has failed.
Many strategies combine these. A fixed target, a hard stop and a time exit, with the stop moved to breakeven at some point, is a common and reasonable design.
A strategy takes 100 trades a year, each risking £100 with a 2R target. It wins 40 of them. The winners earn 40 multiplied by £200, £8,000. The losers cost 60 multiplied by £100, £6,000. Net £2,000 before costs, from a win rate of 40 per cent. The same strategy with a 1R target would need to win more than 50 of the 100 to show any profit at all.
An EA's exit rules should be stated plainly: what the target is, where the stop goes, whether either moves, and whether there is a time limit. If the description says only that trades are "managed intelligently", you do not know how the EA exits, and you cannot judge whether its results depend on a particular kind of market.
Be cautious of EAs whose marketing emphasises very high win rates. A win rate above 80 or 90 per cent is usually achieved by small targets and wide stops, or by no stops at all, and it produces many small gains and occasional large losses. Multiple take-profit levels, closing a third of the position at each, are popular in marketing and rarely improve results over a single well-placed target. The exit design that survives is usually the simplest one, and the live record, not the description, shows whether it works.