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Calculate Crypto Trading Profit Or Loss

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Calculate Crypto Trading Profit Or Loss

To calculate the profits and losses in crypto trading, you need to master the numbers. In addition, you should always keep in mind that your main goal for trading cryptocurrencies is to make a profit.

 Calculating how much you earned (profit) and how much you lost (loss) will help you  balance your portfolio. But how do you do these calculations?

 Profit and Loss calculation is usually one of the most difficult tasks for traders. However, it’s not difficult because I cleared everything. For best results, just read and implement the information here.

 Get this advice!

Before we go any further, let’s mention this: Thousands of crypto traders are losing more money than they are making.

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 This may be due to several factors, such as trading coins without real use cases and earning timely profits.

 As a rule of thumb, you never lose. Therefore, keep this in mind when you start implementing your crypto trading profit and loss strategy.

 There are several different ways to calculate your profits and losses with cryptocurrencies

You can use the following strategies to start calculating how much you have earned and  lost in crypto trading.

1. Subtract the selling price from the cost price.

This is one of the easiest ways to calculate profits and losses in cryptocurrencies. All you have to do is remove / deduct the amount you sold cryptocurrency from the amount you purchased it. Take the example of Bitcoin (BTC). Let’s say Bitcoin is currently trading for $ 10,000. I bought  and sold for $ 10,000 when BTC rose to $ 15,000.

Calculate
Calculate Crypto Trading Profit Or Loss

 In this case,  remove the cost price (price at the time of purchase) from the selling price. That is,  remove the $ 10,000 cost  from the $ 15,000 retail price. The rest ($ 5,000) is your profit.

 You can also calculate the loss using the same model. In this case, let’s say you bought Bitcoin for $ 10,000. But it fell to $ 8,000 and I was worried that the price would drop even further. So you sold at that price. This means you’ve lost $ 2,000.

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2. Use unrealized profit

Sometimes crypto traders try to profit and withdraw from the market because it is unstable. By constantly observing the

 market, traders can directly see whether they are making a profit or losing  their trading. However, being obsessed with the constant fluctuations in the market can prevent traders from seeing the big picture. Let’s say you bought

 Ethereum (ETH) for $ 2,000. Keep an eye on the market. If the price of ETH rises to $ 2,200, it means you’ve already earned $ 200.

 The only difference between this and the subtraction model is that it hasn’t been sold yet.

 However, once the order is completed, the price of Ethereum (ETH) may drop  or drop slightly. This mainly happens  when there are more buy orders  than  sell orders. For example, if you buy ETH for $ 2,000 and then drop to $ 1,800 after placing a sell order,  you have lost $ 200. This change affects the income statement after the sale.

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3. Multiply to get the profit margin

Most of the profits and losses when trading cryptocurrencies are expressed as percentages. Calculation method: You can calculate the profit of cryptocurrency trading by multiplying by growth rate.

 Mechanism:

 Multiplies the price (entry price) at the time of purchasing cryptocurrency by the corresponding percentage formula. The rate of increase between 10% and 50% is expressed as:

  • 1.1 for 10%
  • 1.2 for 20%
  • 1.3 for 30%
  • 1.4 for 40%
  • 1.5 for 50%

Suppose you bought Cardano (ADA) at a starting price of $ 2. You just want to make  10% of the trade and withdraw from the market. Multiply the starting price (the price at which you purchased the ADA) by the corresponding 10% profit margin. That is, $ 2 (admission) multiplied by (x) 1.1 (10%).

 It gives you $ 2.2, where $ 2 is your capital and $ 0.2 is the 10% profit you made. If you want to get 50% off trades as a profit, you can do the same. In this case, the calculation is 2 x 1.5 = $ 3. Remove $ 2 capital. All that remains is 50% of the capital, or $ 1.

 However, you can calculate  100% profit / profit by doing the following: 2 x 2 = $ 4.

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 As a rule of thumb, every time you multiply by 100, add the number “1”.

4. Use a spreadsheet

You can use spreadsheets to organize everything about the profits  and  losses you’ve earned from  trading cryptocurrencies.

Calculate Crypto Trading Profit Or Loss
Calculate Crypto Trading Profit Or Loss

 You can divide everything into the following sections:

 The name of the coin traded Traded unit Amount spent buying coins How much coins were sold  The date you traded them At the end of the exercise, check the starting price (the amount of coins purchased) and the selling price. It becomes clear whether you have won or lost money.

5. Consider using a cryptocurrency calculator to calculate profits and losses

Did you find a spreadsheet that is too boring or demanding to use the percent profit or subtraction model?

 Next, consider using some  online cryptocurrency calculators to see how much you have earned or lost in crypto trading. These calculators can make it easy for you to check the profits and losses you have earned from your crypto trading.

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Knowing how to calculate your profits and losses with cryptocurrencies will make you a better trader Knowing how to calculate your profits and losses is one of the key skills to make you a better trader. In addition, you can try to suppress your desire to get more profit and not lose money.

Frequently Asked Questions (FAQs):

How do you calculate crypto gains and losses?

To know how to calculate crypto gains and losses, check out this videos.

How much tax do I pay on crypto gains?

If you hold the cryptocurrency for more than 36 months, your profits are classified as long-term capital gains tax and are subject to an additional charge and fee of 20%, but are taxed after indexing.

Will Shiba Inu reach 1 cent?

According to WalletInvestors, Shiba Inu will hit around $0.000185 in five years, but expect to cut prices much earlier as Shiba Inu grows and takes over the cryptocurrency market.

Do you pay taxes on crypto losses?

Taxation as Capital Gains: If the crypto is held as an investment, it can be argued that gains / losses from such sales should be reported as capital gains / losses. Otherwise, it may be classified as a short-term capital gain taxed at the applicable personal tax rate.

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Bitcoin

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Top 7 Fastest Growing Cryptocurrency With Huge Potential In 2022
Bitcoin

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Logo of Ethereum

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Cardano

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Top 7 Fastest Growing Cryptocurrency With Huge Potential In 2022
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Most cryptocurrencies are supported by teams of altruistic people, but they do not have companies behind them. Something has to change. 

Daniel Garcia, creator of Daviescoin.

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