In a take profit limit order a limit order (buy or sell) will trigger when the profit price is reached. Take profit orders are often used to set targets for and protect your profits on positions.
To use this order, two different prices have to be set:
Profit price: The price at which the limit order is triggered, selected by you. When the last traded price hits it, the limit order will be placed.
Limit price: The price at which you would like your limit order to fill. Your order will be filled at this price or better.
Both the profit and limit price can be set as an absolute price (e.g. 170 USD), relative to the market price in percentage (e.g. 5% above or below current market price) or relative to the market price in absolute terms (e.g. 10 USD above or below current market price).
It is important to note that your take profit limit order is not directly tied to a position (not reduce only) but is an independent order and if you exit a position in an alternate way the take profit limit must also be manually cancelled.
Example: You have a long position on ETH open and the current ETH/USD price is 150 and you want to lock in the profits on your position when the price reaches 170. However, you don't want a fill price below 168. You open a take profit limit order with the profit price set to 170 and the limit price set to 168. The last traded price hits 170, triggering your profit price. A limit order to sell ETH at 168 is placed in the market, which will fill at that price or better.
Note: Limit orders that execute immediately are treated as taker orders and will incur taker fees.