Many beginners in crypto ask: what is profit and why is it even necessary to calculate it? In fact, this is one of the key points that separates successful traders from those who just buy and wait for months, lingering in a position.

Profit is your target gain in percentage, at which you close the trade. Put simply, it’s a pre-set goal for earnings on each purchase. Instead of just waiting for the coin to grow, you clearly understand at what price you need to sell to achieve the desired profit.

Why is this important? Because without a clear plan, you can easily lose money on fees or end up in a loss if the market turns around. Profit helps you earn small but frequent gains, gradually increasing your capital. It’s like a system, not gambling.

How is profit calculated? It’s simple — one formula is used: the target price equals the entry price multiplied by one plus the profit percentage divided by one hundred. It sounds complicated, but in practice, it’s very easy.

Let’s look at examples. You bought a coin at one dollar and want a 0.5% profit. The target price will be 1.000 multiplied by 1.005, which equals $1.005. You place a sell order at this price.

Another example: you bought at $0.328, want a 0.6% profit. Multiply by 1.006, which gives approximately $0.330. You exit the position at this price.

What profit size should you choose? If you don’t want to linger in a coin — set 0.3–0.6%. If the coin is volatile — you can go for 0.7–1.0%. Above 1.5% is already high risk, as you might not wait for that level, especially if the market isn’t rising.

A very important point: exchange fees. For entering and exiting a trade, you pay about 0.1% each, totaling 0.2%. This means your profit must be more than 0.2%, otherwise, you won’t even break even. If you set 0.5%, your net profit after fees will be about 0.3%.

What happens if you calculate profit incorrectly? Too small — it won’t cover the fees. Too large — you might not reach that price at all and then stay in a loss for several days. Not calculating at all — it’s like going to an unfamiliar city without a navigator; sooner or later, you’ll get lost.

The simple conclusion: always calculate profit before the trade. Don’t guess — use the formula. It’s better to make five trades at 0.5% that you will definitely catch than one at 5% that you will wait a week for. Trading is mathematics, not intuition. Currently, BTC is trading around 81.41K with a plus of 2.45%, ETH at 2.30K plus 1.73%, BNB holding at 681.30 with a growth of 1.67%. On Gate, you can implement this strategy on any pairs.