The answer lies in the hero of our unknown story: trading fees. In the trading world, every move has a cost, and these small fees, which may be 0.1% or less, accumulate and affect your profits.
The secret of the fees: Why can't you ignore them?
When you buy any cryptocurrency on the Binance platform, you pay fees, and when you sell it, you pay another fee. These small fees may not be noticeable right away, but they can be the difference between profit and loss, especially in short-term speculative trades.
If you bought a coin at $1000, then sold it for exactly $1000, you wouldn't get your full money back.
The magic method for calculation: breakeven multiplier
To solve this dilemma, you don't need to be a math expert. All you have to do is use a simple and unique number that allows you to calculate the 'Breakeven Point', which is the price you need to exit at to cover all your costs and fees.
Breakeven multiplier = 1.002001
All you have to do is multiply your entry price by this multiplier.
Practical example:
Let's say you bought BNB at $951.01.
The exit price that avoids loss = 951.01 1.002001 = $952.91.
Therefore, you should place your sell order at $952.91 or higher so you don't lose anything.
Why can't I add a fixed number?
The reason is simple: the fees are a percentage of the transaction value, not a fixed amount. The larger your trade, the larger the fees. Therefore, using the multiplier 1.002001 automatically adjusts to the size of your trade, whether it's small or large.
Always remember that understanding the fees is your first step towards becoming a professional trader. Using this simple method, you can always determine the safe exit point for your trades.
Join the conversation!
* Have you tried this method before?
* What are the biggest challenges you face in calculating profits and losses?
* Share your experience in the comments!
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