I often see beginners in crypto just buying a coin and waiting for it to grow. And then they sit in a losing position for weeks. Do you know what the main mistake is? They don’t plan their exit in advance. So let’s figure out what profit is and why it’s really important.

Profit is simply your target profit in percentage, at which you close the trade. Nothing complicated. You bought a coin at one price, set a goal at a certain percentage higher — and when the price reaches that, you exit. That’s your plan for each purchase.

Why is this necessary? Because without a plan, you’ll either get stuck in the trade or start trading on emotions. Profit helps clearly understand when to leave the position and allows you to earn small but frequent profits. Instead of waiting for one big jump, you take many small gains. This works much more steadily.

How is profit calculated? The formula is straightforward. The target price equals the entry price multiplied by one plus the profit percentage divided by one hundred. It sounds more complicated than it actually is.

Here’s a real example. Suppose you bought a coin at one dollar and want a 0.5% profit. The target price will be one dollar multiplied by 1.005, which equals $1.005. You place a sell order at this price.

Another example. Bought at 0.328, want a 0.6% profit. The target price will be 0.328 multiplied by 1.006, approximately 0.330. You close the position at this price.

Now, what profit should you choose? If you want to avoid hanging in the coin, 0.3–0.6% is optimal. If the coin is volatile, you can try 0.7–1.0%. Above 1.5% is already high risk, meaning you might not reach the desired price, especially if the market isn’t rising.

What happens if you calculate profit incorrectly? Too small a profit might not cover the exchange fee, resulting in a loss. Too large — you simply won’t wait long enough and stay in the loss for several days. And if you don’t calculate at all, it’s like going to an unfamiliar city without a navigator.

An important point about fees. On most exchanges, the fee is about 0.1% on entry and 0.1% on exit, totaling 0.2%. So, the profit should be more than 0.2% just to break even. If you set it at 0.5%, your net profit after fees will be about 0.3%.

The simple conclusion: always calculate profit before the trade using the formula, not by eye. It’s better to make five trades with 0.5% profit each than one with 5% that you might not reach. Trading is math, not intuition. When you understand what profit is and how to calculate it correctly, trading becomes much easier and more predictable.