Scenario:

You have $5,000 USD and want to trade Bitcoin (BTC) on an exchange.

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Step 1: Deposit Funds

You deposit $5,000 USD into your crypto exchange account.

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Step 2: Place a Buy Order

BTC current price = $103,601 per BTC.

You decide to buy approximately 0.04825 BTC.

Calculation:

\text{BTC amount} = \frac{5000}{103601} \approx 0.04825 \, \text{BTC}

You place a market buy order for 0.04825 BTC.

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Step 3: Order Execution

Your buy order is filled immediately at $103,601.

You now own 0.04825 BTC.

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Step 4: Wait for Price to Rise

After a few days, BTC price increases to $110,000.

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Step 5: Place a Sell Order

You decide to sell all your 0.04825 BTC at the new price.

Calculation:

0.04825 \times 110,000 = 5,307.50 \, \text{USD}

You place a market sell order for 0.04825 BTC.

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Step 6: Order Execution & Profit

Sell order executed at $110,000.

You receive $5,307.50.

Your gross profit = $5,307.50 - $5,000 = $307.50 (before fees).