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Here's what beginners often get wrong in trading: they buy a coin and just wait for it to grow. Then they hang in the position for weeks or even months, wasting time and nerves. Do you know what the issue is? They don't calculate the profit.
Profit is — your target exit price from the trade. Put simply, it's the percentage of profit you want to get before selling the coin. If the profit is calculated clearly in advance, you know exactly when to close the position, rather than guessing blindly.
Why is this even necessary? Because profit is — not just a number, but your strategy. When you determine in advance what percentage of profit you need, you:
- Clearly understand when to exit the trade, instead of waiting for a miracle
- Earn small but frequent profits instead of one big one that you never get
- Increase either the number of coins or dollars depending on your strategy
How is this calculated? The formula is simple:
Target Price = Entry Price × (1 + Profit in Percentage / 100)
Let's take a specific example. You bought a coin at 1.000 USDT and want to earn 0.5% profit. Then: 1.000 × 1.005 = 1.005 USDT. This is the price at which you place your sell order.
Another example: bought at 0.328 USDT, want 0.6% profit. Calculating: 0.328 × 1.006 = 0.32997 ≈ 0.330 USDT. You exit at this price.
Now the main question: what profit percentage is optimal to consider?
If you don't want to hang in the coin — take 0.3–0.6%. That's a safe range.
If the coin is volatile — you can risk 0.7–1.0%.
Above 1.5% — it's already high risk to end up with nothing, especially if the market isn't rising.
What happens if you calculate profit incorrectly?
Too small profit (less than 0.2%) — may not cover the commission, and you'll end up in the negative.
Too large — you simply won't reach the target price and stay in loss for several days.
Not calculating at all — it's like going to an unfamiliar city without GPS. You might get lost.
An important point about commissions: on most exchanges, it's about 0.1% for entry and 0.1% for exit, totaling 0.2%. Therefore, the profit should be at least 0.2% to break even. If you set it at 0.5%, your net profit after commissions will be approximately 0.3%.
Practical advice: always calculate profit before the trade. Don't guess; use the formula. Better five trades with 0.5% profit each than one with 5% that you never reach. Trading is math, not intuition.
Here are the current quotes for reference: BTC trades around 78.59K (-0.13% in 24 hours), ETH at 2.33K (+0.24%), BNB stays at 617.90 (-0.09%). The market is calm, a good moment to practice calculating profit with real examples.