Profit is the goal of your earnings: a complete guide to calculations

You need to honestly admit — most beginners in crypto trading make one critical mistake. They buy a coin and just… wait. Wait for days, weeks, or even months, hoping the price will go up. But profit isn’t something that happens by itself. Profit is the result of a clear plan that must be made BEFORE making a purchase.

Let’s understand what this word really means and why it’s so important for your trading.

Why profit is not an optional parameter, but a necessity

When you enter a trade without a profit goal, you’re already losing. Here’s why:

First, without a specific target price, you’ll constantly doubt. Should I exit at +1%? At +2%? Or wait for +5%? These fluctuations lead to poor decisions and often losses.

Second, even if the price rises, you’re not guaranteed to get that profit. The market can turn around at any moment. Therefore, you should exit not “the next time it goes up,” but according to your plan.

Third, profit isn’t just about earning on one coin. It’s about creating a system. If you have 10 trades with +0.5%, that adds up to +5%. But if you’re waiting for one “super trade” at +5%, there’s a high risk of ending up in a loss of 10%.

How to calculate the target price: formula and practical examples

Don’t be scared of math. There’s nothing complicated here. Profit is calculated as a percentage of the price at which you bought the coin.

The formula used is:

Target Price = Entry Price × (1 + Profit Percentage ÷ 100)

Sound complicated? You’ll see it’s a simple calculation.

Example 1

Suppose you bought a coin at 1.000 USDT. You decided your profit target is 0.5%.

Calculations:

• Entry Price: 1.000 USDT
• Desired profit: 0.5%
• Target Price = 1.000 × (1 + 0.5 ÷ 100) = 1.000 × 1.005 = 1.005 USDT

This means you should set a sell order at 1.005 USDT. When the price reaches this level — you automatically exit with a profit.

Example 2

Second scenario: you found an interesting coin at 0.328 USDT. You want to make 0.6% profit.

Calculations:

• Entry Price: 0.328 USDT
• Desired profit: 0.6%
• Target Price = 0.328 × 1.006 = 0.32997 ≈ 0.330 USDT

At this price level, you should sell the coin. Place a limit order to sell — and it’s done.

Optimal profit levels depending on your strategy

But what profit should you choose? There’s no universal answer. It depends on the specific coin and market situation.

If the coin is relatively stable and you don’t want to stay in it: A profit range of 0.3–0.6% is optimal. It allows you to quickly cycle “buy-sell” and accumulate small profits.

If the coin is highly volatile: You can aim for slightly higher profit — 0.7–1.0%. The price will jump, and your target price will trigger faster.

If your profit target is above 1.5%: That’s already considered high risk. There’s a chance the target price won’t trigger, the price won’t rise to it, and you’ll stay in the coin for a long time. Especially if the market isn’t actively growing.

The main mistake beginners make: why fees eat up all the profit

Here’s where it gets interesting. Many forget about fees. And that’s a critical mistake.

On most major exchanges, fees look like this:

• Trade entry fee (buy): about 0.1%
• Trade exit fee (sell): about 0.1%
• Total fee: 0.2%

This means if you set a profit target of 0.2%, all your profit will go to fees, and you’ll break even. You won’t earn anything.

If your profit is 0.5%, after deducting fees, you’ll only have 0.3% net profit. This is an important number to understand.

Conclusion: profit should be at least 0.2% higher than the fee. Otherwise, calculations don’t make sense.

The 80/20 rule: how to choose a profit you will actually get

There’s a very useful principle for beginners. Setting a specific profit target is a balance between ambition and reality.

If you’re just starting out: Aim for a profit of 0.5–0.7%. This is a reliable level that works and allows you to build a sequence of successful trades. Better to have 5 profitable trades than one unachieved dream.

When you gain more experience: You can experiment with 1.0–1.5%. But always keep in mind: the higher the profit, the higher the risk that the order won’t trigger.

Final recommendations: action plan

1. Before each trade, calculate the profit using the formula. Never buy “on intuition.”

2. Consider fees — this is not optional information, it’s a mandatory part of your calculation.

3. Choose a conservative profit — better many small wins than one big loss.

4. Use limit orders — set your target price and forget about the trade. The market will do the rest.

5. Remember: profit is not about guessing, it’s about math. Trading works not on intuition, but on clear numbers and discipline.

When you start planning each trade, when you begin calculating profit with a formula instead of guessing, you’ll move to a completely different level of trading. Good luck with your trades!