Explanation of Contract Transaction Fees in the Cryptocurrency Market
Many people are not clear about how transaction fees work; today, I will explain it in detail.
Transaction fees are often the most overlooked cost in the trading process. Taking the trading fees of Binance as an example, we can calculate it as follows:
Assuming your principal is $1000:
1⃣️ Using 10x leverage, your trading amount will increase to $10,000. If calculated at a rate of 0.05%, the transaction fee for each trade is $5.
Completing one contract trade, including opening and closing positions, the total fee is $10.
Summary: If using 10x leverage and conducting 5 contract trades a day,
The daily fee is: 5 trades * $10 = $50;
The monthly fee is: $50 * 30 days = $1500;
The annual fee is: $1500 * 12 months = $18000.
2⃣️ If using 20x leverage, the trading amount will increase to $20,000, and the transaction fee for each trade is $10.
Completing one contract trade, the total fee is $20.
Summary: If using 20x leverage and conducting 5 contract trades a day,
The daily fee is: 5 trades * $20 = $100;
The monthly fee is: $100 * 30 days = $3000;
The annual fee is: $3000 * 12 months = $36000.
This is just based on calculations using 10x and 20x leverage. If using higher leverage, such as 100x, the fees will be even more astonishing.
Through these calculations, it can be seen that over a year, fees can add up to tens of thousands of dollars.
Therefore, the fees saved are profits earned. Even in cases where improper operations lead to liquidation, the returned fees can provide you with the capital to start over. Thus, properly planning and managing trading costs is crucial for long-term profitability.
