Topic: Daytraders Questions... Calculating Trading Profit and Locking In Profits - page 2. (Read 1150 times)

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. 

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?


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.

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.

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

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. 

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

Can any daytrader reply to this?

You say


Ok, what I think they're referring at, is this:
Most small coins can't be bought with us$ but only with BTC. So you would have to buy BTC first, to buy your coin A. So if you buy 1BTC with your $5000. you don't have $5000 anymore but you now have 1BTC. Then you buy coin A for that, and then later sell your coin A for 0.5BTC which is $10k then, yes you've made a nett profit. But only if you sell your BTC back for us$ and withdrawl. Then you have made a $5k profit. But as long as you keep it in BTC, to invest in the next coin, then you've lost 0.5BTC.

Most investors don't think in $ anymore, they think in BTC (me too). So it's their goal to accumulate as much BTC as possible. And as BTC fluctuates, this ammount of BTC may be worth more $ at one point and less $ at the next moment. but as we all think that BTC will always go up on average in the end, we're fine with the fluctuation of BTC even when it goes down a bit, because it will also go back up again at some point..

Plus as you said, if you lose compared to BTC, you could've better left it in BTC. So if you want to make good trades: buy low (compared to BTC), sell high (compared to BTC).




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?


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?


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?

Hi there thanks for the response.


Okay so in this example that you used, yes this is the type of example that i like to look at.  Yes if altcoin a goes from 1 dollar to 2 dollar and i buy 5000 of it at 1 dollar, it cost me 5000.  If it doubles to 2 dollars, i basically doubled my money so i have 10000 total so 5000 profit. 


Yes that makes sense if btc went up to 20k at the time... i would only get back 0.5btc for my 5000 altcoins whereas i invested 1 altcoin to buy those 5000 alts earlier so i get back only half of my altcoins. 


You say yes i made a profit here of $5000.  I know its $5000 minus the buying/selling fees but yes this is what im looking for. 


But is there a reason why those other posters kept telling me i lost money here?  Both posters kept saying i lost because i received less btc than i bought with.  Thus i could buy an altcoin at 0.0007 btc and even if the price went up for the altcoin, if btc goes up a higher percentage, then when i sell that altcoin, i could only receive 0.00065 btc.  They said you have to make sure you receive more btc per alt when you sell than when you buy.  That did not make sense because if i receive less btc... well if btc price is higher, then well it shouldn't matter.


Yes that makes sense if i have that 1 btc and just hold it as oppose to using it to buy 5000 altcoin in your example, i would make more assuming btc goes up from 5k to 20k and the altcoin went up from 1 dollar to 2 dollar.  Yes that make sense i lost money against the btc.  However, if you are daytrading and looking to make profits, then does that really matter assuming you are looking to invest in altcoins only with those certain btc?


Is there a reason why those posters kept mentioning im losing money here in this trade with my numbers?  Because what you said.. makes absolute sense.  The only thing was i didn't think about when looking at profit in that example was hey if you just kept the btc instead... you would have made more assuming btc went up higher percentage than the altcoin.  The way those posters spoke.. it was as if okay if you invest in an altcoin, you need to make sure it increased at a higher percentage than btc during that period.  For example if you buy an altcoin and it goes up from 1 dollar to 3 dollars... you better make sure btc don't go from 5000 to more than 15000 otherwise you lose money.  That made wonder... how is it even possible to make money investing in altcoins then?  Such that what would be the point of trying to make 10 percent or even 20 percent profit on a coin from buying it if btc goes higher than that.  And the thing was when i read altcoin discussion, i never read anything about this.  Everything is which coin will double or 3x or more etc and i didn't read any post about you lose money if btc goes higher percentage than the altcoin. 


Can you answer these other questions i just posted?  And thanks for your post because your post makes absolute sense.  And can others here chime in and comment on fromholland's post and confirm this is true?  Because this makes sense to me as he says yes there is profit whereas those other posters say there isn't.

Yes, true. For every altcoin that's not paired with USD(T). Because then you will have to sell back to BTC, and you will get less BTC back than you had invested in this altcoin.

BUT technically you could have made a nett profit. Let me explain, with figurative numbers:

Let's say you're buying altcoin A with 1BTC. BTC is at $5000 and A is at $1. So you're buying 5000 A's.
After 2 months, the value of A went up from $1  to $2 and you want to take profit.
But BTC went up to $20k in the same time.
If you sell them now (back to BTC), you will get only 0.5BTC for your 5000 A's.
Then you can sell your 0.5BTC back to fiat, which will give you $10k. You have certainly made a profit, $5000 to be exact.
BUT: if you hadn't invested in altcoin A and had left your 1 BTC in BTC, you would've owned $20k now instead of $10k. So relatively you've lost money, against the BTC.

Please where can a newbie learn about trade

you mainly need to worry about volatility of btc prices

Can any other daytraders reply to this?  I was told on another forum that this is not correct... because even though im getting less btc than i invested even though lisk goes up, well the price of btc went higher so you do have profit.

This is what i mentioned earlier that doesn't make sense. 


Even if i receive 0.00065 btc per lisk after lisk goes from 5 dollars to 6 dollars or 0.0007 btc to 0.00065 btc, well im getting less btc than i bought with.  However, the btc price is higher than it was before.  So the total amount of btc now i have in USD that i withdrew at that moment is higher than the usd value right before i bought the lisk right?  Because if that is the case, yes i lose btc.  But don't i gain profit here?


Can someone else also comment on this?  Because that means even if a coin goes from 1 dollar to 10 dollars, then you could lose money if bitcoin 15 times itself when you sell your altcoin at 10 dollars?

Okay if in that example i gave i would lose money, then how is even investing in altcoins profitable then if bitcoin is only going to go up? 


The thing is i have bitcoin but those are the bitcoin that i held.  Im planning to buy bitcoin with USD so i could get altcoins.  Thus lisk etc.  So that situation still applies?  Because if i could just buy an altcoin like lisk with usd, then i would do that instead.  Thus if that coin price goes up or down, then thats how much profit you should make.


So basically i cannot invest in any altcoin and lock in 10 or 20 percent profit if i believe btc will go higher than the altcoin percentage during that time?  For example, say i buy lisk at 5 dollars or 0.0007btc and buy 1000 of it.  Say after a very short bit... lisk goes to 6 dollars or 0.00065 btc because bitcoin went up a lot as well.  So here, i lose money?  If thats the case, how can you even make money then on altcoins if you are betting against bitcoin?  I mean so you are saying if you buy altcoin and sell it at the same buy price of 0.00065 btc or 5 dollars... but bitcoin dropped a lot in price... then when you sell it for btc, you gain money?  This sounds confusing because what about those people that buy altcoins for 1 dollar and then it went up to 5 dollars etc?  Because bitcoin when it was 300 dollars for example definitely has 5x its price so those people who invested in coins that are 1 dollar and went up to 5 dollar loses if bitcoin was 300 at that time and went higher than 1500 when they were ready to sell that altcoin?  Because if this is the case, this is really ridiculous that you cannot buy altcoins with usd and cashout with usd.  I mean unless there is something im mentioning wrong here... why has there not been traders who demand there should be usd?

In your example of buying lisk at $5/0.0007BTC and selling at $6/0.00065BTC, yes, you lost money.

If you had just held the BTC it went from $7142.85 to $9230.76.  Your 1,000 lisk only went up $1000USD minus fee's.  But your actual investment lost ground to BTC and dropped from 0.7BTC to 0.65BTC.   If you had just held the 0.7BTC it went up $1461.53, no fee's.  You lost over $461+ dollars by trading. 

Bitcoin is currently sitting at $8,000USD.  I think most of us expect it to pass $10,000USD in the next 60-90 days.  That is a 25% increase.  In order for your trading to be profitable you have to outperform 25%.  Otherwise just sit on your Bitcoin and do nothing while making 25%.


orion

When you say bitcoin drops, it makes altcoin look more attractive.  What do you mean by this?  You mean if you want to buy altcoins?

Yes people say look at btc and not usd. 

But you are telling me its possible to lose money if you invested in a coin like lisk where you bought 1000 shares at 5 dollars or lets just say 0.0007 btc.  Then when the price hits 6 dollars... lets just say 6 dollars is now 0.00065 btc.  Then you sell it for btc.  So here, moneywise you should be up 1000 dollars minus fees.  But you get back less btc than you started with. 

So here, this is NOT what you want to do?

However, you do make around 1k profit minus fees though right since even though you receive less btc than you invested even though the price went up, well that 0.00065 btc is worth more than the 0.0007 btc that you initially used to buy lisk?

So in this example, you can't lock in any profits and send money to your bank account to lock in the 1k minus trading fees?  Because i thought you would transfer whatever btc amount is around 1k to lock in your profits?  Or it does not work this way?

Yes this concept is confusing.  Because here... when you invest in altcoins and it goes up... you need bitcoin to either stay at same price or go lower in order for you to get more bitcoin right?  However, what if you already are holding bitcoin that you don't touch etc and want to invest in altcoins.  Because i obviously do not want bitcoin to go down because i have a lot more money in bitcoin than investing in altcoin.

So do daytraders either daytrade bitcoin/eth/litecoin because they can deal with usd only?  Or they only trade altcoins and don't own bitcoin because if bitcoin goes up, then they lose bitcoin if altcoins go up etc assuming bitcoin goes up enough?

The USD price is there purely as a reference.  Use it or don't.

If Bitcoin drops then it makes altcoins look much more attractive.

Again, you need to stop converting everything to USD, work in BTC.  Trade your BTC for lisk at .0007BTC and sell when they are at .0008BTC.  Don't worry about the dollar, fiat is irrelevant to trading altcoins for bitcoins.  Fiat only comes into play when you cash out/in for BTC.

This is a hard concept to grasp but you need to forget the dollar, think in bitcoin.  Otherwise you will always be trading at a loss and will be broke very quickly.

orion