How to Calculate Profit on a Trailing Down Bot?

How to Calculate Profit on a Trailing Down Bot?

If you’re thinking of buying the latest trailing down bot, it’s important to make sure it will be worth your while before you commit to making the purchase. Here are the steps you’ll want to follow to ensure you don’t waste your time or money on one of these unnecessary pieces of machinery that cost upwards of $7,000 US Dollars in some cases!

Trailing Down Bot

A trailing down bot is a type of trading bot that automatically executes trades following the downward trend in the market. This type of trade takes advantage of the natural tendency for prices to move in an upwards direction. In order to calculate your profit from using this type of trade, you will need these four pieces of information: 

  • The number of shares you want your trade to execute (in USD). 
  • The price where you want your trade to buy shares (in USD). 
  • The price where you want your trade to sell shares (in USD). 
  • Your broker’s commission percentage. 
  • Whether or not you’re going to use stop-loss orders.

What is a trailing stop loss?

A trailing stop loss is an order that follows the price of the market, and sells when the market falls below a certain point. It’s also called a trailing stop, because it trails behind the price at which you would like to sell your shares. For example, if you buy stocks for $20, and want to protect yourself against losses, but don’t want to sell them all at once for fear of missing out on any gains that may occur in the future, then you might set up a trailing stop loss order at $18. If the price of the stock falls below $18, then your shares will automatically be sold by your broker. Your account will have dollars less than before. You can decide how much money you are willing to lose before selling your shares with a trailing stop loss order. The less money you’re willing to lose, the more money you’ll make.

How do you calculate it?

Calculating profit on a trailing down bot is simple, but there are multiple ways to do it. The first way is by calculating the differences in the buy and sell prices of the stocks in your account. This can be done by subtracting the purchase price of each stock from the sale price of each stock, then dividing this number by two. 

The second way is by calculating the difference between your total market value and your initial investment. This can be done by dividing your total investments into 100%, then multiplying that number with your current portfolio balance, minus any fees you paid for trading. If the ratio between these two numbers is greater than 1:1, then you made money and the ratio should be subtracted from one. If the ratio is less than one, then that number should be multiplied by one before being subtracted from one.

If both calculations have a net positive result, your profits are calculated as 100% + (ratio – 1)%. If both calculations have a net negative result, your losses are calculated as 100% – (ratio * 1). For example if I invested $1000 dollars with 5 shares at $5 per share and sold them at $8 per share ($50), I would have profited *5=6000%

Trailing Take-Profit Vs. Trailing Stop-Loss

The trailing take-profit and the trailing stop-loss are two different orders that can help traders manage their trade positions. They both have the same basic logic, but they’re used for different reasons. The take-profit is an order where you set your desired percentage return that you want from your trade. For example, if your trade was worth $100 and you set the take-profit at 10%, then once it reaches $110, your order would be executed and the trader would make $10 in profit. The stop-loss is an order where you set a price point that causes the position to exit automatically if it hits that point or below it. Let’s say again our trade is worth $100 and we put in a stop loss of $90. As soon as the trade hits $90, it would get executed and now our account has lost $10. So there is a difference between a take-profit and stop-loss: A take-profit will always be activated if reached, while a stop loss only activates when reaching certain points such as above or below specific prices.

Successful Investors Typically Know their Exit Plan Before Committing Capital

A good exit plan is often the difference between success and failure in an investment. For example, if you invest in a company and they go bankrupt, there’s usually not much you can do about that. But if they had been doing well but the investors wanted to cash out while the stock was still high, then this would be an appropriate exit plan. The same goes for a startup company. If you want to sell your company after it becomes profitable, then you need to know what your exit plan will be ahead of time so that you can plan accordingly. In order to calculate profit on a trailing down bot, all you need to know is: 

  • when the bot started; 
  • how much money was put into it; 
  • how many shares are being bought; 
  • at what price those shares were bought. 

The following formula shows how to calculate net profit from this type of trade: 

*Number_Shares_Owned = Net Profit. Number_Shares_Bought + Number_Shares_Sold. 

Using this formula, one could figure out the percentage their profits have grown over time by multiplying Number Shares by Initial Investment Cost (without any fees). However, one should also take fees into consideration because they reduce both gains and losses. That’s why it’s important to use the Return-On-Investment (ROI) Formula.

Conclusion

There are various ways to calculate the profit of your trade. Profit is calculated by taking the total trading cost and subtracting it from the total trading amount. The total trading cost is calculated by summing up the commission, spread, and slippage. The commission is how much money you will pay your broker for executing your order. This fee usually ranges from 10-25%. Spread is how much money you will be charged per unit traded, usually around 0.1%. Slippage is how much money you will lose when there’s a difference between the price at which your order was executed and the quoted price of your desired trade execution. It can vary in amount depending on what type of order you placed and how fast it was executed. To find out your total trading cost, use this formula: Trading Cost = Commission x Number of Units Traded + Spread + Slippage. Read more for these type of blogs.