Take profit limits are normally associated with margin open positions.
As their name indicates, they are used to close an open position and to “take profit” on a profitable position when the price is moving in a favorable direction to the open position (up for longs and down for shorts). Currently QUOINE implements TP using market orders via the OMS as explained in previous sections. The OMS sends market orders to the matching engine once the profit target price is reached. If the position is long, the system would use a market sell order to effectively close the position. This is a bit cumbersome and can be confusing for users, as sometimes their positions may not be closed (as orders are not filled or only partially filled) even if the price crosses the target price. This could be due to liquidity or sudden price spike or both. A better way to implement TP orders is to use limit orders. One advantage of using limit orders is that they shown in the order book and result in visible liquidity. Most experienced trades would use TP and SL orders (stop loss - described in the following sections) to manage their risk.
Similar to TP, stop loss limits are usually associated with open positions and act upon them when the price indicated by the user is reached. As their name indicates, SL limits are designed to allow the trader to stop or cap their losses when the market moves against their position. They are implemented using market orders. Upon detecting the price has reached the “loss cut” price, the OMS sends a market order to the matching engine and proceeds to use that order to effectively close the position.
See how to set up Take-Profit and Stop-Loss here: [Margin] How to set Take-Profit and Stop-Loss for a margin trade