Trading Calculator & Strategy Documentation

By Umid Hasanov (Economist, Programmer, Trader, Project Manager)

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Introduction

This documentation explains how to use a structured trading approach and a dedicated calculator to help manage trades more efficiently. Instead of making decisions on impulse, you’ll establish clear parameters for buying, selling, and profiting—removing much of the guesswork from the process.

The strategy and calculator described here apply to various assets: cryptocurrencies, stocks, commodities, and more. By setting profit targets, spacing out orders, and defining your total investment, you aim to reduce emotional decisions and improve trade outcomes.

Core Principles

• Systematic Execution: Plan all buy and sell orders in advance, minimizing emotional responses and guesswork.
• Risk Management: Adjust your investment size and order spacing according to market volatility to help limit losses.
• Profit Optimization: Increase your position as prices decline (averaging down) and sell at predetermined profit points, potentially improving your cost basis and returns.
• Adaptability: Use this method for cryptocurrencies, stocks, commodities, or other markets—simply adjust parameters to fit each asset’s volatility.

The Importance of Market Analysis

While the strategy and calculator provide a framework, understanding the market is essential:

• Market Conditions: Determine if the market trends up, down, or moves sideways. Commodities often have more predictable patterns due to global supply and demand, while cryptocurrencies can fluctuate widely.
• Asset Type & Risk: Commodities typically face lower chances of extreme manipulation. Cryptocurrencies can sometimes experience sudden, dramatic moves from large players. Keep this in mind when choosing spacing and risk levels.
• News & Fundamentals: Track geopolitical events, regulatory changes, and industry news. Commodities may react in a more measured way, while cryptocurrencies can respond sharply to unexpected developments.
• Liquidity & Volume: Ample liquidity generally leads to smoother order execution. Commodities often trade in established markets, while smaller cryptocurrencies may have unpredictable volume. Understand the liquidity profile of your chosen asset before committing capital.

Risk and Money Management

Invest only amounts you can afford to lose. Break down your total investment into multiple buy levels. If prices drop, you buy more and potentially improve your overall entry price should the market rebound.

Consider how far apart your orders are placed:

• Wider Spacing (e.g., 10%): Fewer orders trigger, offering more cushion in volatile environments.
• Narrower Spacing (e.g., 1%): More orders trigger, quickly averaging down costs, but may require more capital if prices keep falling.

Discipline in Trading

Discipline is crucial. Once you’ve set your buy and sell targets, stick to the plan. After several trading cycles, review results and make adjustments if necessary. Avoid scrapping your approach halfway through due to short-term market noise.

Strategy Overview

1. Set Parameters: Identify current price, total investment, profit target, risk percentage, and number of orders.
2. Averaging Down: If the price drops by a set percentage, a new buy order at a lower price is triggered.
3. Incremental Investment: Each subsequent buy invests 25% more than the previous one, aiming to improve your cost basis as prices fall.
4. Profit Targets: Each buy order has a corresponding sell order at a chosen profit margin. When prices recover, you secure your profit.

Risk and Volatility Level

Select a risk level for spacing out your buy orders. Aim to cover a realistic price range the asset is unlikely to exceed entirely:

• Low Risk: 10% intervals
• Medium Risk: 5% intervals
• High Risk: 1% intervals

If you pick 5% spacing, each new buy order is 5% cheaper than the last. This ensures your orders fit a plausible trading range.

Important: Once orders are placed, let the market move within those bounds. Avoid adjusting your plan too soon. Capitalize on natural price fluctuations—profits can come not only from upward trends but also from normal volatility.

Using the Trading Calculator

1. Identify the Asset: Enter the asset name (e.g., Bitcoin, Apple, Oil).
2. Input Current Price: Provide the current market price.
3. Set Total Investment: Decide how much capital you’re allocating.
4. Choose Profit Target: For instance, 10%, 20%, or 30% profit margins.
5. Set Risk & Spacing: Select Low (10%), Medium (5%), or High (1%) spacing between orders.
6. Number of Orders: Determine how many buy/sell pairs you want.
7. The 25% Rule: Each subsequent buy invests 25% more than the previous one.
8. Calculate: Press “Calculate” to see suggested orders, showing where to buy, how much to invest, and when to sell for your target profit.

Example Scenario

Example with Oil:

• Asset: Oil
• Price (P): $72 per barrel
• Total Investment (A_total): $10,000
• Profit Target (T): 20%
• Risk (R): 5% per order
• Number of Orders (N): 6

Order #	Buy Price	Buy Amount	Sell Price	Sell Amount
Order 1	$72.00	$888	$86.40	$1066
Order 2	$68.40	$1110	$82.08	$1332
Order 3	$64.80	$1388	$77.76	$1666
Order 4	$61.20	$1735	$73.44	$2082
Order 5	$57.60	$2168	$69.12	$2602
Order 6	$54.00	$2711	$64.80	$3253

Here, orders are spaced at 5% intervals, and each subsequent buy invests 25% more than the previous one. As the price moves, some buy orders may fill at lower prices, and their corresponding sell orders aim to capture a 20% profit. By not adjusting your plan too frequently, you’re positioned to benefit from normal market ups and downs.

Mathematical Formula & Explanation

The formulas below show how the strategy calculates investments, prices, and profits.

Key Inputs

• P: Initial price
• A_total: Total investment
• N: Number of orders
• R: Risk percentage per order (e.g., 5% = 0.05)
• T: Profit target as a decimal (e.g., 20% = 0.20)
• 1.25: Each subsequent buy invests 25% more

Step-by-Step Formulas

1. Multiplier Sum (M_sum)

Msum = (1.25^0) + (1.25^1) + ... + (1.25^(N-1))

2. Base Investment (A_base)

Abase = Atotal / Msum

3. Buy Prices

Buy_Pricei = P × (1 - R × i)

4. Buy Amounts

Buy_Amounti = Abase × (1.25^i)

5. Sell Prices

Sell_Pricei = Buy_Pricei × (1 + T)

6. Sell Amounts

Sell_Amounti = Buy_Amounti × (1 + T)

In Summary

These formulas guide the entire process, ensuring you know how much to invest, at what prices to buy, and when to sell for your chosen profit margin. By following these calculations, you remove emotional guessing and aim for consistent, data-driven trading decisions.

Tips for Long-Term Success

• Stay Informed Through News: Base your decisions on current events, industry updates, and global market conditions rather than relying solely on technical charts. Market makers and major players often move prices in ways that charts alone cannot predict.
• Continuously Adjust Your Grid: Monitor the asset’s volatility and fine-tune your buy/sell intervals as conditions change. This ensures that your strategy remains adaptable and effective over time.
• Avoid Impulse Purchases: Even after a profitable trade, resist the urge to immediately scale up your investment. Instead, use the calculator to re-evaluate your parameters, ensuring each new trading cycle begins with careful planning.
• Avoid False Promises and Chart Gimmicks: Be wary of anyone claiming to have insider information, as genuine insiders do not share their data—especially not in private or paid channels. Similarly, do not rely on geometric shapes drawn on charts; the forces influencing price movements do not consider your screen’s sketches. Focus on fundamentals, price action, and current news to pinpoint the best trading opportunities.
• Maintain Discipline and Patience: Consistently follow your predefined plan and avoid chasing short-term gains. By trusting the strategy and exercising patience, you increase your chances of achieving steady, long-term returns.

Conclusion

This approach and accompanying calculator offer a more systematic way to manage your trades. Plan your orders, set your profit targets, and let the natural movements of the market work in your favor. Over time, as you refine parameters and gain experience, you can evolve into a more confident and flexible trader across various financial landscapes.