Some of you may know that lately, I have been doing some stuff with crypto-currencies and blockchains. One of those things is the trading between many crypto-currencies and the US dollar of course. As you will see, using the trades websites is a business for everyone. Business for us as traders but a business for the exchange with their fees. The first problem you will face, regardless your skills for trading is to know the Breaking Even Price.
The Breaking Even Price is the minimum or maximum price you need to sell or buy in order to have a zero profit when doing trading. This value will help you to prevent looses as trading is playing with money. Knowing this value is as easy as the division of the market currency by the quote currency after subtracting the fee. The fee may apply to the quote currency if you are buying or to the market currency if you are selling. Look the following examples:
- Buying: For example, in an ETH-USDT market, when I buy ETH, I bought 6.21945523 E for a price of 65.75002497 USD with a commission fee of 0.00932918 E. In this case, the breaking even price is 65.75002497/(6.21945523 - 0.00932918) = 10.5875508 USD/E. Which it means that if I want to do a profit, I must sell my Ethereums at a minimum price of 10.5875508 USD/E.
- Selling: Now, in the same ETH-USDT market, when I sell my ETH, I sold 9.90436603 E at a price of 103.50079448 USD with a commission fee of 0.25940049 USD. The breaking even price is (103.50079448 - 0.25940049)/9.90436603 = 10.4238265909 USD/E. Which it means that if I want to do a profit, I must buy Ethereums at a maximum price of 10.4238265909 USD/E.
Enjoy and happy trading!blog comments powered by Disqus