What Is a Worked Example of Fixed Target?

What “Fixed Target” means in forex orders

A “fixed target” take-profit setup specifies an exact price level where the position should be closed (the profit target). “Fixed” means the target price is chosen up front and stays constant, rather than moving as price moves.

In practice, the order typically needs several inputs:

Entry price: the price used as the reference point for the trade.
Target price: the exact price level that defines the fixed take-profit.
Position size: how much is traded.
Costs and execution assumptions: bid/ask spread, commissions, and whether fills occur exactly at the target.

Because “fixed target” is an order setting, not a guarantee, outcomes still depend on market behavior and how the platform executes orders.

Worked example (all assumptions stated)

Below is one numerical scenario to show how a fixed target can be evaluated. This is informational, not a prediction.

Assumptions

Instrument: forex pair quoted with 4 decimals (example format like 1.2345).
Entry price: 1.2000.
Direction: a long position (profit increases when price rises).
Fixed target price: 1.2050.
Position size (for the example math): 10,000 units (often called “1 lot” in many demos, but always check the contract size).
Pip definition: 0.0001 equals 1 pip.
Costs: assume zero commission and zero spread for the calculation (this is a deliberate simplification to isolate the target distance).
Execution: assume the close occurs exactly at the target price with no slippage.

Calculation steps

Compute pip distance from entry to target:

Entry: 1.2000
Target: 1.2050
Price change: 1.2050 − 1.2000 = 0.0050
In pips: 0.0050 / 0.0001 = 50 pips

Map pips to profit using a simplified pip value assumption:

For many standard contract setups, 10,000 units of a major pair can correspond to a pip value around the currency of the quote. For this example, we will avoid currency conversion by assuming a pip value of “1 unit of account per pip” for 10,000 units.
Profit ≈ 50 pips × 1 (per pip) = 50 units of account.

Important: the pip-to-cash conversion depends on the exact contract specification, the account currency, and any conversion rules. The numerical result above is only valid under the pip-value assumption stated in step 2.

What a fixed target does mechanically

The key point is that the target price is predetermined (1.2050). When price reaches that level and the order is executed, the position closes. The distance (50 pips) is fixed by the chosen entry/target pair.

Material limitations and failure modes

Even with a “fixed” target, several issues can break the simplified expectations:

Spread and bid/ask mechanics

A long position is sensitive to whether the platform triggers and fills using bid or ask.
If spread is non-zero, the effective entry and the true fill price at the target may differ from the reference prices used in the example.

Slippage and execution quality

“Target price reached” does not always equal “filled exactly at the target price.”
Fast moves, limited liquidity, or market conditions can lead to fills away from the exact level.

Partial fills and order handling

Some systems can partially fill orders or apply different execution policies.
If the position is only partially closed, the realized profit will differ from the full-target calculation.

Gaps through the level

If price jumps past the target without trading at it in a way that triggers the order, the realized fill can occur beyond the intended level.

Costs that were assumed away

Commissions, financing, or other fees (if present) reduce net results.

Because these factors vary by broker/provider, instrument, and account setup, the worked example should be treated as a template for verification rather than a guaranteed outcome.

How to independently verify a fixed-target calculation

To verify a fixed target yourself, check each assumption against your actual order settings and instrument details:

Confirm the pair’s pip size and contract specification (how profit per pip is computed). 2. Confirm the exact entry price used by your platform for the reference. 3. Confirm the order’s target/trigger rule (the exact price level the system uses for closure). 4.