A take-profit order is an automated limit order to close an open position at a profit. The order is executed, and the trade is closed if the market price touches the take-profit price, else it does not get filled.
The take-profit order is placed above the entry price in a long trade, while it is placed below the entry price for a short trade.
Stop-loss and take-profit are usually used by day and swing traders. Unlike long-term investors, day and swing trader close their positions after small gains or loss.