Daytraders Questions... Calculating Trading Profit and Locking In Profits

[jerry0]

Can any daytrader reply to this?

[orion17]

This is the other thing that has me a bit confused.  If i buy lisk at 5 dollars and buy 1000 shares.  You want to sell it at 6 dollars.  ...

Think BTC and only BTC.  You need to get the USD out of your head.  When you spend 0.7BTC to buy something and sell it for 0.65BTC that is a loss.
When you are day trading you are only thinking about increasing your BTC holdings.  If I take 0.01BTC and trade with it today I want to end up with more than 0.01BTC at the end of the day.
If you consistently buy and sell at a BTC loss each time then you will run out of money.

orion

[fromholland]

yes i know most small coins cant be bought with fiat and you need btc.  You say when you sell that coin you made a net profit.  But you then say only if you sell that btc back for us and withdraw.  Well you mean if you sell it for btc and turn it to usdt or send it to gdax/gemini to turn it into usd... then there is profit right?
Correct.

However, if i keep that in btc... yes i did lose 0.5btc that is correct.  But if i use that 10k worth of btc to buy another coin... well im getting the proper usd amount for the next coin.  Let say the next coin i want to buy is ark.  But no matter what happens after i sell the lisk... i do have a net profit no matter what right?  Thus if btc goes down, it has no effect because i already had a gain on the sale of lisk?  Thus if btc goes down and then later i sell it, i sell bitcoin at a loss right?  And thus the buy/sale of lisk will always show that net profit?
No, because then you should have bought Ark with the 1BTC. Now you buy it with 0.5BTC so you've made a loss.

This is the other thing that has me a bit confused.  If i buy lisk at 5 dollars and buy 1000 shares.  You want to sell it at 6 dollars.  Well i know you can just put the price in btc to sell right after you get the lisk.  Such as you don't have to check prices and bittrex will automatically sell it for you to 6 dollars.  However let say you wait a while and then you put 6 dollars in btc.  Well there would be a difference in btc price here assuming btc price changes which it always does.  But that has no effect on your profit though right?  Thus you would get the same profit whether you put down 6 dollars you want it to be sold now or 6 dollars later on since btc price changes?
Like orion17 says, get the US$ out of your head. Think in BTC and make it your goal to accumulate as much BTC as possible. So only make trades where you outrun BTC. You might think this will be very hard because BTC always goes up, but it doesn't. It fluctuates, just like any other coin. Rides the waves and try to jump over at the right moment. If you continue to make losses in BTC, you're better off just leaving your money in BTC and let that ride.

[jerry0]

This is the other thing that has me a bit confused.  If i buy lisk at 5 dollars and buy 1000 shares.  You want to sell it at 6 dollars.  ...

Think BTC and only BTC.  You need to get the USD out of your head.  When you spend 0.7BTC to buy something and sell it for 0.65BTC that is a loss.
When you are day trading you are only thinking about increasing your BTC holdings.  If I take 0.01BTC and trade with it today I want to end up with more than 0.01BTC at the end of the day.
If you consistently buy and sell at a BTC loss each time then you will run out of money.

orion

If you only think btc, does that mean usd price is not relevant at all then?  Because that doesn't make sense.  For example if lisk is 5 dollars.  What is my purpose of buying lisk?  Not the fact that i think it would go up.. but the fact that it should go higher than btc in terms of percentage?  So if someone wants to bet on altcoins but want nothing to do with btc, they cannot do this?


When you are daytrading stocks, though i never done this, the purpose is to sell at higher price than you buy because you are looking at profit.  So with altcoins if you buy lisk at 5 dollars... say you buy 1000 of it.  Let say after a while lisk drops to 3.50.  But during this time, bitcoin goes from 5k all the way down to 2500.  So in this example, your coin dropped down in price by 30 percent.  Btc dropped down in price in 50 percent.  So are you happy to sell your lisk for btc now that lisk goes from 5 to 3.50 and bitcoin goes from 5k to 2500?  Because you will be getting back more btc than you bought lisk with.  However... is this a gain or loss?  In terms of usd profit/loss, this is 100 percent a loss.  But in terms of btc... this is a gain.  So traders would rather have a situation like this as oppose to lisk going from 5 dollars to 6 dollars and you buy/sell 1000 shares and btc going up from 5000 to 6500?


Because at the end, you are getting profit.  In the first example, is that recorded as a profit or loss such as capital gain or loss.  Because i have to assume the first example is a capital loss even though you made btc in that example. 

[fromholland]

BTC will go up, us$ will always stay us$. Which one would you prefer?

[jerry0]

yes i know most small coins cant be bought with fiat and you need btc.  You say when you sell that coin you made a net profit.  But you then say only if you sell that btc back for us and withdraw.  Well you mean if you sell it for btc and turn it to usdt or send it to gdax/gemini to turn it into usd... then there is profit right?
Correct.

However, if i keep that in btc... yes i did lose 0.5btc that is correct.  But if i use that 10k worth of btc to buy another coin... well im getting the proper usd amount for the next coin.  Let say the next coin i want to buy is ark.  But no matter what happens after i sell the lisk... i do have a net profit no matter what right?  Thus if btc goes down, it has no effect because i already had a gain on the sale of lisk?  Thus if btc goes down and then later i sell it, i sell bitcoin at a loss right?  And thus the buy/sale of lisk will always show that net profit?
No, because then you should have bought Ark with the 1BTC. Now you buy it with 0.5BTC so you've made a loss.

This is the other thing that has me a bit confused.  If i buy lisk at 5 dollars and buy 1000 shares.  You want to sell it at 6 dollars.  Well i know you can just put the price in btc to sell right after you get the lisk.  Such as you don't have to check prices and bittrex will automatically sell it for you to 6 dollars.  However let say you wait a while and then you put 6 dollars in btc.  Well there would be a difference in btc price here assuming btc price changes which it always does.  But that has no effect on your profit though right?  Thus you would get the same profit whether you put down 6 dollars you want it to be sold now or 6 dollars later on since btc price changes?
Like orion17 says, get the US$ out of your head. Think in BTC and make it your goal to accumulate as much BTC as possible. So only make trades where you outrun BTC. You might think this will be very hard because BTC always goes up, but it doesn't. It fluctuates, just like any other coin. Rides the waves and try to jump over at the right moment. If you continue to make losses in BTC, you're better off just leaving your money in BTC and let that ride.

Yes my thinking is it would be hard for the altcoin to outrun btc because btc keeps going up.  And the thing is you want to sell lisk at a higher percentage than btc goes up right?  So you are fine with altcoin going from 5 dollars to 3.50 after you buy it if btc goes from 5k to 2500?   I would assume the dream scenario when you buy altcoins would be you buy an altcoin it goes up very much... and bitcoin drops all the way down?


So let me ask another thing.  Say you buy an altcoin that cost 10 cents.  Let say you believe this coin will 10x.  But when you buy it... then eventually the coin goes up 10x so it goes from 10 cents to 1 dollar.  But say btc when you first bought the altcoin cost 5k.  That coin went up to 50k when you are getting read to sell.  Here.. you would not be gaining any btc since that altcoin and btc went up the same rate right?  However... you are still clearly making profit here?  I just want to make sure of this.  Because in this example ... say you bought 10000 shares of an altcoin at 10 cent for 1000 usd.  Here you gained around 9000 usd less fees right?  But you gained zero btc in the process.  I dont find any issue with this because in this example, wouldnt you just cash out that 9k in profit worth of btc into usd and there is your profit?  


Also is there a reason why no one talks about this on the altcoin discussion forum?  Everyone wants to know the next coin that will 3x, 5x, 10x, 50x, 100x.  Because based on the statements being made, whats the point of finding a coin that will 3x if btc 3x as well?  To me, it would mean profit because the coin 3x.  But to others... it would mean no btc profit.  Why is that a big deal when you should be looking at money that you convert to usd cashed into the bank account.   So basically if you are daytrading altcoins or holding altcoins, you should be getting rid of all your btc then?  Because if you want altcoins to go up... btc will need to go down.  So are you suppose to only choose one?  Because if i invest in lisk... well i want lisk to increase in price.  However, the amount of money im investing in lisk is not as much as i have in btc.  And obviously i dont want lisk to go up a bit... but btc goes down a lot more.  Or even if they go up or down the same percentage... well i lose money because i have much more btc than i would in lisk.   So do you have any opinions of this as well?  My thoughts were if i were to buy altcoins... i want btc to go up ... i want altcoins to go up.

[fromholland]

So let me ask another thing.  Say you buy an altcoin that cost 10 cents.  Let say you believe this coin will 10x.  But when you buy it... then eventually the coin goes up 10x so it goes from 10 cents to 1 dollar.  But say btc when you first bought the altcoin cost 5k.  That coin went up to 50k when you are getting read to sell.  Here.. you would not be gaining any btc since that altcoin and btc went up the same rate right?  However... you are still clearly making profit here?  I just want to make sure of this.  Because in this example ... say you bought 10000 shares of an altcoin at 10 cent for 1000 usd.  Here you gained around 9000 usd less fees right?  But you gained zero btc in the process.  I dont find any issue with this because in this example, wouldnt you just cash out that 9k in profit worth of btc into usd and there is your profit?  

If you buy a house for $100k, and you sell it 10 years later for $250K, then you've made a $150k profit. But if all other houses are now $350K, where will you invest now?

Also is there a reason why no one talks about this on the altcoin discussion forum?  Everyone wants to know the next coin that will 3x, 5x, 10x, 50x, 100x.  Because based on the statements being made, whats the point of finding a coin that will 3x if btc 3x as well?  To me, it would mean profit because the coin 3x.  But to others... it would mean no btc profit.  Why is that a big deal when you should be looking at money that you convert to usd cashed into the bank account.   So basically if you are daytrading altcoins or holding altcoins, you should be getting rid of all your btc then?  Because if you want altcoins to go up... btc will need to go down.  So are you suppose to only choose one?  Because if i invest in lisk... well i want lisk to increase in price.  However, the amount of money im investing in lisk is not as much as i have in btc.  And obviously i dont want lisk to go up a bit... but btc goes down a lot more.  Or even if they go up or down the same percentage... well i lose money because i have much more btc than i would in lisk.   So do you have any opinions of this as well?  My thoughts were if i were to buy altcoins... i want btc to go up ... i want altcoins to go up.

Find the coins that will 3x 5x 10x against BTC. If you can't find them, stay with BTC.

What I do, is sell my coin A for BTC when coin A is high (against BTC). Then wait for coin A to go down again (against BTC) and buy back for the same amount of BTC, now you have more coin A which means a profit. Wait till it goes back up, and trade for BTC again. Now you'll have more BTC than before.
Keep doing this and you'll get there.
I never take any money out but if you want to do that, wait till BTC is high against the us$ and then cash out, to maximize your profit.

[jerry0]

I get what you mean here with that example.  So profit and not btc is what traders look at.  But are there traders that look for profit?


Well i think it would be hard to find coins that will 3x, 5x and 10x against btc.  If btc is going up, then i have to find a coin that does better against it.  So that means i need not only that coin to go up, but perform a lot better than btc.


Well if you never take money out... then where do you get your profit?  Where do daytraders get profit then?  Because i thought daytraders goal are to make profit and thus cashing out few times for 1-2k for example would be pretty good if they could buy the lows and sell the highs etc.  I thought daytraders want to make a few hundred here, a few thousand here etc.



So which scenario do daytraders prefer?


Buy lisk at 5 dollars and buy 1000 shares for 5000 usd or 0.0007 btc per lisk.  BTC is at 5000 usd.  Lisk goes up to 10 dollars.  BTC goes up to 15000 usd.


Or


But lisk at 5 dollars and buy 1000 shares for 5000 usd or 0.0007 btc per lisk.  BTC is at 5000 usd.  Lisk goes down to 3.50.  BTC goes all the way down to 2000 usd.



So in this example, you made profit on lisk but lose btc when you sell the lisk for btc because btc went up 3x whereas your lisk only 2x.



In the second example, you lose profit on lisk when you sell it for btc because it dropped from 5 dollars to 3.50.   Lisk dropped 30 percent.  BTC however dropped 60 percent.  So when you sell your lisk for btc... you are getting back more btc than you started with.  That is what you say is the goal of daytrading right... get more btc than you started with?



So which situation does a daytrader like here?  Because my thoughts are well in the 1st example, the guy made around 5000 usd profit.  But he lost btc in the process when selling lisk for btc.


In the 2nd example, the guy lose 1500 usd profit right?  However... here he gained btc in the process when selling lisk for btc since btc dropped 60 percent. 

[fromholland]

Well i think it would be hard to find coins that will 3x, 5x and 10x against btc.  If btc is going up, then i have to find a coin that does better against it.  So that means i need not only that coin to go up, but perform a lot better than btc.

For BTC to 5x it would have to go to $40k in a short term, that's not gonna happen. So find a coin that can do that, they're out there.

Well if you never take money out... then where do you get your profit?  Where do daytraders get profit then?  Because i thought daytraders goal are to make profit and thus cashing out few times for 1-2k for example would be pretty good if they could buy the lows and sell the highs etc.  I thought daytraders want to make a few hundred here, a few thousand here etc.

I guess it depends if it's your sole ways of generating income. It that would be the case, than you'd have to take out money to pay your mortgage, groceries etc.
For me that's not the case. I see crypto as my piggybank / 401K, so I just let it all sit and accumulate exponentially.

So which scenario do daytraders prefer?

Buy lisk at 5 dollars and buy 1000 shares for 5000 usd or 0.0007 btc per lisk.  BTC is at 5000 usd.  Lisk goes up to 10 dollars.  BTC goes up to 15000 usd.

Or

But lisk at 5 dollars and buy 1000 shares for 5000 usd or 0.0007 btc per lisk.  BTC is at 5000 usd.  Lisk goes down to 3.50.  BTC goes all the way down to 2000 usd.

So in this example, you made profit on lisk but lose btc when you sell the lisk for btc because btc went up 3x whereas your lisk only 2x.

In the second example, you lose profit on lisk when you sell it for btc because it dropped from 5 dollars to 3.50.   Lisk dropped 30 percent.  BTC however dropped 60 percent.  So when you sell your lisk for btc... you are getting back more btc than you started with.  That is what you say is the goal of daytrading right... get more btc than you started with?

So which situation does a daytrader like here?  Because my thoughts are well in the 1st example, the guy made around 5000 usd profit.  But he lost btc in the process when selling lisk for btc.

In the 2nd example, the guy lose 1500 usd profit right?  However... here he gained btc in the process when selling lisk for btc since btc dropped 60 percent.  

Rule #1 is: buy low, sell high.
So in your 1st example your Lisk has gone up = high. However BTC is high also, and we don't buy high. In this case you would sell your Lisk for USDT, and wait for either Lisk or BTC to go down to get back in again.

In your 2nd example you say: But lisk at 5 dollars and buy 1000 shares for 5000 usd or 0.0007 btc per lisk.  BTC is at 5000 usd. but if BTC is at $5000 and Lisk is at $5, then 1 Lisk would be 0.001BTC.
If then BTC would go down to $2k and Lisk down to $3.50 then Lisk would be 0.00175BTC. This would mean a 1000 x 0.00075 = 0.75BTC profit which would be very good!

[jerry0]

Hi there yes its hard for btc to 5x short term.

Yes i meant as a sole way of generating income.  Thus having profits into bank.  So in my example, then doing what i said would be fine?  Thus cashing it out for btc and then immediately sending it to gdax/gemini or even use bittrex for usdt and cash out to bank?

In the 1st example i used, you say sell your lisk for USDT.  You cannot sell lisk for USDT.  Almost all the altcoins besides the main ones you cannot sell for USDT.  You need to sell it for btc first.  So you have to go through btc.  So i assume you mean when you sell it for btc... immediately sell it for usdt on bittrex or send that btc immediately to gdax/gemini to cash out to usd?

In the 2nd example, yes there is 0.75 BTC profit.  The issue here is you are losing USD.  Because when you calculate the capital gain or loss, this is a loss.  How would this be good if you know what i mean?

So here yes you lose usd but you gain BTC.

But in these 2 examples i gave you, which one would a daytrader want... example 1 or 2?  I cant imagine its 2 because 2 would be a 1500 usd loss... example 2 would be a 5000 usd gain.

[fromholland]

I would prefer the 0.75BTC profit because I got that BTC at $2000 which means I got it low so now it has the potential to become much more!

[jerry0]

Okay but thats because you dont plan to cash out till much later right?  If you had to cash out for bills and everything, which you choose?

But for someone who daytrades, which situation do they want?  1 or 2?  The thing is i still can't understand anyone wanting 2 more than 1 because in the first example, you made money and can cashout to bank account.  Once you cash it out or send it to bittrex, you essentially locked in your profits right?

But when you are calculating gains or losses, in the 2nd example you have a 1500 dollar loss.  In the 1st example, you gainded 5000 dollars.  So i really dont know why people would choose the other one. 

[fromholland]

So i really dont know why people would choose the other one. 

Because the potential to go up to bigger heights is much higher.

It's very unlikely to be a professional daytrader with only $5000 invested. It's likely to be much more. So this would mean, that you would reinvest most of your profits, and take out only a small portion to live off. So everything you reinvest, you want to reinvest LOW so it can grow HIGH.

[treather]

I don't day trade, I find it very stressful. More often than not I hold my bitcoins for as long as I can. However, I have traded in the past, and not just cryptocurrencies. If you are receiving less btc than you had before initiating the Lisk trade, I consider it a loss. The btc - usd price has no bearing here.

Lets assume the price of bitcoin drops, what then? Would you still consider it a profitable trade? I doubt it.

[Hamphser]

I don't day trade, I find it very stressful. More often than not I hold my bitcoins for as long as I can. However, I have traded in the past, and not just cryptocurrencies. If you are receiving less btc than you had before initiating the Lisk trade, I consider it a loss. The btc - usd price has no bearing here.

Lets assume the price of bitcoin drops, what then? Would you still consider it a profitable trade? I doubt it.

This is why i did stop on becoming an active day trader because it do really give me stress rather than enjoyment on engaging into trading field.I have experienced forex trading and stocks. Being scalper isnt really easy since you would really need to be active when theres sudden movement on prices.How much more on bitcoins or altcoins. Prices are way too volatile you should have active eyes,active thinking and have active hands. hehe

[jerry0]

So i really dont know why people would choose the other one. 

Because the potential to go up to bigger heights is much higher.

It's very unlikely to be a professional daytrader with only $5000 invested. It's likely to be much more. So this would mean, that you would reinvest most of your profits, and take out only a small portion to live off. So everything you reinvest, you want to reinvest LOW so it can grow HIGH.

I understand the potential part.


Well when i say invest 5000 usd... i mean thats one trade.  You could have 25k or 50k etc but you use 5000 for 1 coin such as lisk at 5 dollars etc.  Then you try to grow your account balance etc.  Such that imagine someone starts with 5000 and then grows it to 10k, then 20k etc.  Well actually i meant you have a bankroll for trading.  But you already have money in your bank that pays for expenses.   So even though you want to have profit to cash out, you still can pay off stuff with money you already have in the bank etc. 

[jerry0]

I don't day trade, I find it very stressful. More often than not I hold my bitcoins for as long as I can. However, I have traded in the past, and not just cryptocurrencies. If you are receiving less btc than you had before initiating the Lisk trade, I consider it a loss. The btc - usd price has no bearing here.

Lets assume the price of bitcoin drops, what then? Would you still consider it a profitable trade? I doubt it.

If you receive less btc than you start with, you consider that a loss.  But when you calculate capital gains and losses, well that is certainly a gain right?  I can't imagine you say you had a loss here because you receive less btc but btc went down etc. 

Wait... so you telling me if lisk goes from 5 dollar to 3.50 when you sell it when btc goes from 5k to 2k... that is not a profitable trade?  Well usd wise, that is absolutely a loss.  But with many of you mentioning getting more btc than you started with is more important... then how is this not profitable because you would end up with 0.75 more btc because btc dropped higher percentage than lisk?

[jerry0]

I don't day trade, I find it very stressful. More often than not I hold my bitcoins for as long as I can. However, I have traded in the past, and not just cryptocurrencies. If you are receiving less btc than you had before initiating the Lisk trade, I consider it a loss. The btc - usd price has no bearing here.

Lets assume the price of bitcoin drops, what then? Would you still consider it a profitable trade? I doubt it.

This is why i did stop on becoming an active day trader because it do really give me stress rather than enjoyment on engaging into trading field.I have experienced forex trading and stocks. Being scalper isnt really easy since you would really need to be active when theres sudden movement on prices.How much more on bitcoins or altcoins. Prices are way too volatile you should have active eyes,active thinking and have active hands. hehe

You mean when looking at the btc or altcoin price?  Or the altcoin price in btc?  When you did daytrade, did you do bitcoin or altcoin or both?  And can you tell me what is more important here?  Is it usd profit/loss or btc profit/loss.  And in my 2 examples, which would you has a daytrader prefer.  Because i always thought when you sell your altcoin back for btc... the most important thing is usd.  Thus if you get back 5k usd more than you started with, thats a profit.

[fromholland]

Today BTC is around $8k.

Think 10 years from now. Will BTC be worth more than that, or less?
So which one would you want to accumulate, BTC or $?

[jerry0]

Well it should be worth more.  But you want to have money coming into your bank account, well you can't just hold.  Thus i mean for someone to cash out consistent profits.  So if thats the case, isn't usd more important?