I’ve noticed that many beginners get confused when they see trading signals, especially with formats like: Buy XRP 0.540-0.545, then marked with TP1: 0.552, TP2: 0.561, stop loss 0.532. They start to wonder—should I sell at TP1 or wait for TP2? Sell all at once or in parts? Today, I’ll clarify this issue for everyone.
First, TP stands for Take Profit, which simply means your target selling price. TP1 is the first target, usually more conservative and easier to reach quickly. TP2 is the second target, offering larger profits but with slightly higher risk. Sometimes you’ll see TP3, which is typically used only during very strong market movements.
You might ask, why not just set a single target price? The reason is simple—markets are too unpredictable. Sometimes the price hits TP1 and then pulls back; other times it rockets all the way to TP2 or TP3 and keeps going. So setting multiple targets allows you to lock in profits early to reduce risk, while still leaving some position open to pursue bigger gains. That’s the art of balancing.
How should you operate in practice? Suppose you enter a trade based on a signal with 300 units. Here’s my recommended allocation: sell 50% at TP1 to lock in profits and reduce risk. Keep the remaining 50% for TP2; if the market continues upward, you can capture even larger profits. Of course, you can adjust this based on your risk preference—conservative traders might do 70% at TP1 and 30% at TP2, while more aggressive traders might do the opposite.
There’s a crucial technique many people overlook—after reaching TP1, immediately move your stop loss to the entry price. What’s the benefit? It makes your remaining position “risk-free.” Even if the market reverses later, you won’t lose money; you just earn less. This is one of the most practical risk management methods I’ve used.
But I’ve also seen many common mistakes. Some people close all positions at TP1 and then miss out on bigger moves later—very regretful. Others wait until TP2, but the market reverses and they don’t even protect their TP1. Some ignore stop losses altogether, and a single pullback wipes out everything. These are costly lessons.
Let me give you a real example. Suppose the signal is to buy SOL at 145-147, with TP1 at 151, TP2 at 158, and a stop loss at 141. You invest 500 units, then sell half at 151 to make 250 units profit, and keep the other 250 units. If the market continues rising, sell at 158; if not, follow your stop loss plan. That’s a complete, rational trading plan.
Honestly, most people focus on how to buy, but true experts focus on how to sell. When to sell, how much to sell, and risk management—these are the key factors that determine how much you ultimately earn. Learning to use tools like TP1 and TP2 to standardize your trading helps control emotions, lock in profits promptly, and let winning trades run. That’s the difference between professional traders and gamblers.
