I often hear the same question from beginners — what is profit and why even bother calculating it? Let’s figure it out, because it really is the foundation of all trading.

Profit is simply your profit target, which you set before entering a position. When you buy a coin, you should know in advance at what price you’ll exit. Otherwise, you end up like most beginners — you buy, and then you just sit there, waiting for it to go up. The result? You get stuck in the position for weeks or months.

Why is this needed? Profit helps you clearly understand when to close a position. This way, you can earn small but frequent profits. Instead of trying to catch one big wave, you make five to ten smaller trades and grow your capital. It’s much more reliable.

How to calculate it? The formula is simple. The target price equals the entry price multiplied by (1 plus the profit percentage divided by 100). It sounds complicated, but in practice, it’s straightforward.

Here’s a real example. You bought a coin at $1 and want to make 0.5% profit. The target price will be 1 multiplied by 1.005, which equals 1.005. This is the price at which you place your sell order. Another example: you bought at 0.328 and want 0.6% profit. You calculate: 0.328 multiplied by 1.006 equals 0.330. You exit at this price.

What profit size should you choose? If you don’t want to stay stuck in the position for a long time, take 0.3-0.6%. If the coin is volatile, you can go for 0.7-1.0%. Above 1.5% is already a high risk of not reaching your target, especially if the market isn’t moving up.

Errors in calculation lead to problems. Too small a profit might not cover the commission (less than 0.2% is basically a loss). Too large — and you simply won’t wait long enough for that price; you’ll end up in the red. Not calculating profit at all is like driving to an unfamiliar city without a navigator.

What’s important to remember about commissions? The exchange charges about 0.1% when you buy and about 0.1% when you sell, totaling 0.2%. That means your profit should be at least 0.2% just to break even. If you set it at 0.5%, your net profit after the commission will come out to roughly 0.3%.

In conclusion, always calculate your profit before making the trade. Don’t set it by guesswork — use the formula. It’s better to make five trades at 0.5% each than one at 5% that you might never reach. Remember: trading is math, not intuition. Right now, BTC is trading around 82.28K (+1.78%), ETH at 2.41K (+1.52%), BNB at 647 (+2.99%). Good time to practice.