How To Track Profit While Trading  Crypto

The crypto market is one of the most volatile financial markets in the world; it is very unpredictable. 

Amid all this volatility, keeping track of your trading profit is essential when trading your cryptocurrencies. The reason is pretty simple; you might think you are making money while you don't know that your crypto portfolio is bleeding. 

Taking note of the profits you have made and the losses you have taken also helps you create a more formidable strategy to make a consistent trading profit. 

This comprehensive guide will teach you how to calculate your profit while trading and the importance of doing so. 

What Is Crypto Trading Profit And Loss 

In the crypto market, a bullish and bearish market represents both profit and loss; when the market is bullish, there is a higher chance of making a profit, and the same applies to a bearish market. 

To find answers to what is crypto trading profits and loss, we will be making use of different cryptocurrencies for illustrations. 

Let's say you buy Solana (SOL) for about $100, then the market gets bullish, and the price rises to $300; you would have made $200. The same applies when the market is bearish; let's say you buy that same Cardano for a price of $200, and then it goes down to $100, you would have made a loss of $100.

So crypto trading profit is simply when you make more money than your original entry price while trading crypto. In contrast, a crypto trading loss is when the price of your crypto goes lower than its original price point.

Importance Of Tracking Profit While Trading Crypto 

• Tracking your crypto trading profit and loss will help you in risk management. 
• Tracking your profit and loss while trading crypto will help you know when to leave the market. 
• The crypto market is unstable; tracking your profit will prevent you from losing all of your portfolios due to the market's volatility. 

Whether you are doing crypto trend trading or crypto arbitrage trading, it is key to know how to track your wins and losses as this shows a better understanding of effective crypto trading strategies.

Ways To Calculate Your Crypto Trading Profit And Loss 

Trading Spreadsheet 

Using a spreadsheet provides a solution for tracking profit while trading crypto, although it requires some knowledge of spreadsheet applications. 

You can track your crypto trading profit using Google Sheet or Microsoft Excel. All you have to do while carrying out this task is to input the price at which you bought a cryptocurrency, the current market price, and the number of coins. Doing this will help you know if you are running at a profit or loss at the current market price. 

Unrealized Profits 

When trading crypto, you should constantly check the amount you are set to gain and the amount you are set to lose. However, you might not have time to leave the market and use a spreadsheet to calculate your profit as you are trading crypto. 

So the best way to track your crypto profit in a situation like this is by using what is called "unrealized profit". 

Let's say you bought a Solana for a price of $400, and as you are trading, the price rises to $700, you would have made $300. But since you have not withdrawn the crypto from the market or converted it to a stablecoin, it is not yet considered a profit. The same thing applies when you are losing; it is not yet classified as a loss because you have not yet closed to trade. 

For those day trading crypto, this is how to track your profit while trading crypto to avoid leaving the market. 

Crypto Profit Calculator 

This is one of the most advanced yet effective ways of calculating your profit while trading crypto. It does not matter if you are day trading crypto or carrying out any other form of trade; you can use it to calculate profit for any kind of trade. 

An excellent example is the Crypto Profit Calculator, which helps crypto traders to determine their returns, margins, profit, and loss. Before choosing any crypto profit calculator, it is recommended that you carry out your research to select a crypto profit calculator that suits you. 

Read More: Altcoins vs. Stablecoins: What is the Difference?

Tips For Crypto Trading

1. When you are trading crypto, it is very important that you stop yourself from panic buying because of FOMO (fear of missing out). 
2. Have your crypto trading strategies ready, don't go into the market unprepared or without guidance. 
3. When the value of a cryptocurrency is dropping, it is best that you pull out of the market and then go back when there is some stability. 
4. Don't expect all coins to perform very well. When a coin's supply becomes limited, it is recommended that you don't enter the market.
5. Manage your risk as your trading crypto. 

Read Also: Cryptocurrency trading tips you need to know

Wrapping Up 

In the crypto market, a coin can go from $200 to $900 within minutes. It is also possible for a coin to go from $1100 to $200. 

Learning how to track your profit while trading crypto will help you curtail market volatility's effects.

You can track your profit using a crypto profit calculator, a spreadsheet, and an unrealized profit. 

Start Trading Crypto On Yellow Card