# Calculation of profit in digital currencies

Calculation of profit in digital currencies

What it takes to calculate profit and loss in cryptocurrencies is mastery with numbers, in addition to that you should always keep in mind that your primary goal of cryptocurrency trading is to make profits.

Calculating how much you made and how much you lost helps you balance your portfolio, but this task is usually one of the most difficult things for traders to do. These scales will tip over after going through this article that will sort everything out, just read the information given here and implement it to get the best results.

Methods for calculating profit and loss in digital currencies
You can calculate how much you won and how much you lost while trading cryptocurrency using the strategies below:
1- Subtract the selling price from the cost price
This is one of the simplest ways to calculate profit and loss in digital currencies. All you have to do is subtract or subtract the amount you sold the coin from the amount you bought it for.
Let’s say you bought \$10,000 in BTC and sold when it rose to \$15,000. In this case, you need to subtract the cost price (the purchase price) from the selling price. That is, you will remove the cost price of \$10,000 from the sale price of \$15,000, and the remainder is \$5,000, i.e. the profit.
You can also use the same form to calculate your loss. Let’s say you buy Bitcoin for \$10,000, but it drops to \$8,000. Perhaps you were afraid that the price would go down further, so you sold at that price, meaning you lost \$2,000.
2- Use the unrealized profit
Cryptocurrency traders are sometimes eager to take profits and then exit the market due to its volatility. Constant monitoring of the market helps traders know if they are making profits or losing in their trades. However, obsession with the constant changes in the market may prevent the trader from seeing the full picture.
Let’s say you buy Ethereum (ETH) for \$2,000, just watch the market. If the price of ETH goes up to \$2,200, that means you made \$200.
It is also possible for the price of Ethereum (ETH) to drop once your order is executed, and this happens most of the time when buy orders are higher than sell orders. If you buy ETH for say \$2,000, and it drops to \$1,800 after placing your sell order, that means you lost \$200.
3- Use multiplication operations to get the percentage of profit
You can calculate the profit in cryptocurrencies by multiplying the price at which you bought (the entry price) by the corresponding percentage. The percentage of profits between 10% and 50% is expressed as follows:
against 10%
against 20%
against 30%
against 40%
against 50%
Let’s say you buy Cardano (ADA) with an entry price of \$2, and you want to make a 10% profit and then exit the market. What you will do is multiply your entry price, i.e. the price at which you bought your ADA, by the corresponding percentage of 10%. This will give you \$2.2, where \$2 is your capital and \$0.2 is 10% of the profit you made.
You can organize all your profits and losses from cryptocurrency trading using a spreadsheet across sections such as:
The names of the currencies you traded