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

Celebrity

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Quote from: jerry0 on December 31, 2017, 03:10:28 PM

Hey all someone mentioned using usdt would be a way to park your value. Do most daytraders do this or not?

If USDT doesn't have a serious problem, then it's okay to store your dollar in terms of USDT. But you can't know if USDT will be solid like this. Some rumors are now on the market about USDT that it's not backed with real USD.

jerry0

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Hey all someone mentioned using usdt would be a way to park your value. Do most daytraders do this or not?

jerry0

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The issue here is most altcoins are not traded against USDT.

So how would you lock in profits like with lisk in my examples.

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Quote from: fromholland on November 22, 2017, 11:35:39 AM

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 $?

You are right BTC to altcoin trading is quite different. Here the profit depends on both coins. Let me tell one thing if you buy 1 BTC worth of altcoins today. Next month your altcoin price will increase $1, and the bitcoin price is increased $2k, or $3k is it worth for you? To do altcoin trading, USDT is best this is my opinion.

fromholland

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Quote from: jerry0 on November 22, 2017, 12:21:02 PM

I get what you mean as the rest stay invested. However what if you want to continually take money/profits out then? Because if someone is daytrading full time, they are suppose just make profit and not cash out or something? Or cashout once every few months etc?

Well im sure there are daytraders that make profit and want to take out money again over and over right?

Now why would they want to cash out? Because they want their money to stop growing??

Only time when someone usually returns to fiat (us$) is when they think the market is overheated and expect a dump (or some investors choose to keep a certain percentage of their portfolio in fiat, just in case everything dumps suddenly, then they can buy the dip with that fiat).

alexpayne

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Quote from: jerry0 on November 22, 2017, 12:08:09 PM

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?

Holding is just an action of pussy person want to earn some pennies from Bitcoin ( not including BTC years-holders). So calculating the suitable profit for day-trading is necessary to protect your profits.

jerry0

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I get what you mean as the rest stay invested. However what if you want to continually take money/profits out then? Because if someone is daytrading full time, they are suppose just make profit and not cash out or something? Or cashout once every few months etc?

Well im sure there are daytraders that make profit and want to take out money again over and over right?

fromholland

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Quote from: jerry0 on November 22, 2017, 12:08:09 PM

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?

No, because you want to cash out as little as needed, the rest stays invested. Money in your bank account doesn't accumulate, so basically you're losing potential profit there.
Daytrading doesn't mean, invest us$ into something, hopefully make profit, and then take all us$ out again. It's building up a portfolio and let that grow by making swing trades on a day to day basis.

jerry0

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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?

fromholland

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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

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Quote from: Hamphser on November 22, 2017, 05:29:27 AM

Quote from: treather on November 22, 2017, 04:58:48 AM

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.

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Quote from: treather on November 22, 2017, 04:58:48 AM

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

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Quote from: fromholland on November 22, 2017, 04:57:37 AM

Quote from: jerry0 on November 22, 2017, 04:48:15 AM

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.

Hamphser

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Quote from: treather on November 22, 2017, 04:58:48 AM

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

treather

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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.

fromholland

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Quote from: jerry0 on November 22, 2017, 04:48:15 AM

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.

jerry0

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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

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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

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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

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Quote from: jerry0 on November 21, 2017, 11:31:19 PM

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.

Quote from: jerry0 on November 21, 2017, 11:31:19 PM

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.

Quote from: jerry0 on November 21, 2017, 11:31:19 PM

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!

Topic: Daytraders Questions... Calculating Trading Profit and Locking In Profits (Read 1150 times)