Definition:
Is the predetermined price level at which a trader intends to close a profitable trade to secure gains. It’s a crucial component of a trading strategy, designed to lock in profits and manage risk by preventing emotional decisions from influencing the exit point.

Formula on Forex trades:
PROFIT AIM = (FIRST ORDER PRICE – TARGET PRICE) x QUANTITY x CONTRACT SIZE x PIP VALUE

STOP LOSS =  (STOP PRICE – FIRST ORDER PRICE) x QUANTITY x CONTRACT SIZE x PIP VALUE

Formula for Options and for Futures trades:
PROFIT AIM = (FIRST ORDER PRICE – TARGET PRICE) x QUANTITY x CONTRACT SIZE

STOP LOSS =  (STOP PRICE – FIRST ORDER PRICE) x QUANTITY x CONTRACT SIZE

Formula for Stock trades:
PROFIT AIM = (FIRST ORDER PRICE – TARGET PRICE) x QUANTITY

STOP LOSS =  (STOP PRICE – FIRST ORDER PRICE) x QUANTITY