Crypto scalping must cover the spread paid through its fills, entry and exit fees, and any further execution or holding costs before a short price move produces a net gain. Calculate the hurdle for a complete round trip using executable buy and sell prices. Trade frequency increases total turnover and costs; maker pricing changes the assumptions but does not guarantee a fill.
For this cost review, a scalp means a trade seeking a small price move over a short holding period. The arithmetic needs no fixed number of seconds or minutes. It needs an entry, a completed exit, actual quantities and an explicit fee model. A candle showing a favorable move is insufficient evidence of a profitable completed trade.
Define one complete round trip
A buy followed by a full sale contains two execution legs. Each leg can incur commission. If an interface counts each order as a trade, 50 completed round trips can mean 100 orders, and potentially many more individual fills. A cost estimate must say which count it uses.
Start with the exact instrument and account schedule. Coinbase Advanced documents fees that depend on product, fee tier and whether execution provides or takes liquidity. It also explains that the immediately matched part of an order can pay taker fees while a remainder that rests and later fills pays maker fees. A limit-order label alone therefore does not establish the fee for every fill. Coinbase Advanced fee mechanics.
All numbers below are hypothetical. They describe a long round trip with the same base quantity bought and sold, fees paid separately in the quote currency, no borrowing and no funding. They are neither an exchange rate quotation nor a result from a trading strategy. The bid-ask spread guide explains how to measure the underlying quote before applying this cost model.
Solve with executable prices
Let q be the base quantity, B the average buy fill and S the average sale fill. Let fb and fs be decimal entry and exit fee rates. With no additional included costs:
Net result = q × S × (1 − fs) − q × B × (1 + fb)
Setting that cash result to zero gives:
Required sale fill = B × (1 + fb) / (1 − fs)
The denominator matters because the exit fee changes with the sale notional. Adding two fee percentages is a useful rough check, but the cash equation supplies the exact threshold within these assumptions. The break-even price worksheet extends the accounting to holding costs and partial exits.
To translate this threshold into a midpoint move, name the spread assumption. Suppose the initial midpoint is 100 USDT and the best prices are 99.98 bid and 100.02 ask. The spread is 0.04 USDT, or four basis points relative to that midpoint. Assume the absolute half-spread stays at 0.02 USDT until exit.
A taker buy fills at 100.02. A taker sale fills 0.02 below the later midpoint. At an invented 0.06% fee on each leg, the required exit midpoint is:
100.02 × 1.0006 / 0.9994 + 0.02 ≈ 100.16009606
That is a rise of approximately 16.0096 basis points from the starting midpoint. Four basis points of spread plus six basis points of fee on each side gives the close approximation of 16. The exact answer differs because fees use the two execution notionals.
These are different thresholds: the required sale fill is about 100.14009606, while the required midpoint is about 100.16009606. Comparing the former with a chart midpoint would conceal the exit half-spread.
A favorable 12-basis-point move can still lose
Now assume 20 units are bought at the initial ask. The midpoint rises from 100 to 100.12, and the exit book is 100.10 bid and 100.14 ask. Assume enough quantity is available at each quoted price and both orders fully execute there. Retain the invented 0.06% taker fee on both legs.
| Cash-ledger item | Calculation | USDT |
|---|---|---|
| Buy notional | 20 × 100.02 | 2,000.40 |
| Entry fee | 2,000.40 × 0.0006 | 1.20024 |
| Sale notional | 20 × 100.10 | 2,002.00 |
| Exit fee | 2,002.00 × 0.0006 | 1.20120 |
| Gross fill-price gain | 2,002.00 − 2,000.40 | 1.60000 |
| Net completed result | 1.60 − 1.20024 − 1.20120 | −0.80144 |
The midpoint move would produce a 2.40-USDT gain if both legs could execute at their respective midpoints. Crossing from the entry ask to the exit bid reduces that figure by 0.80 USDT. Commissions remove a further 2.40144 USDT. The total difference from that midpoint benchmark is 3.20144 USDT.
Do not subtract another four-basis-point spread charge from the final row. The actual buy and sale prices already include it. Likewise, if actual weighted fills are worse than the displayed quotes, those prices already contain the observed execution difference. A second generic slippage deduction would count it again.
This example also shows why a high percentage of trades with positive gross price P&L does not, by itself, establish positive net results. The size of each gain, loss and cost remains necessary.
Maker assumptions change the hurdle
A maker entry at the initial bid changes the purchase price as well as the commission assumption. A maker exit at the later ask changes the sale price. Those favorable prices require counterparties to trade against resting orders; putting an order into the book does not secure both fills.
For a conditional comparison, keep the initial midpoint at 100, the absolute half-spread at 0.02 and quantity at 20. Invent a 0.03% maker fee alongside the 0.06% taker fee. Assume complete fills at the indicated quotes and no other costs.
| Assumed fills | Buy price | Sale price at unchanged midpoint | Loss at unchanged midpoint, USDT | Break-even midpoint rise, basis points |
|---|---|---|---|---|
| Taker buy, taker sale | 100.02 | 99.98 | 3.20000 | 16.0096 |
| Maker buy, taker sale | 99.98 | 99.98 | 1.79964 | 9.0036 |
| Maker buy, maker sale | 99.98 | 100.02 | 0.40000 | 2.0006 |
The final column solves the same cash equation with the relevant entry fee, exit fee and exit quote side. It assumes the spread stays fixed in USDT. A constant percentage spread, changing spread or weighted fills across several levels requires recalculation.
Even the fully maker row loses at an unchanged midpoint in this constructed example: its captured 0.80-USDT price difference is smaller than its 1.20-USDT commissions. A real rebate would enter as a signed reduction in commission, with eligibility and actual receipt checked.
The table also does not estimate whether either maker order fills. In another hypothetical path, a buy fills at 99.98 and the midpoint then falls to 99.90. With the same half-spread, an immediate sale at the 99.88 bid loses 0.10 per unit before fees. The cheaper entry fee cannot remove that price loss. Completed maker trades must be examined alongside unfilled orders, partial positions and forced taker exits.
Coinbase Advanced's specific post-only implementation rejects the entire order if any portion would execute immediately on arrival. That controls the initial liquidity role; it does not ensure completion. Coinbase Advanced order execution options. Record such rejections as attempts, rather than silently turning them into fills in a simulation.
Trade frequency adds turnover
Repeat the 12-basis-point example across 50 separate, identical hypothetical episodes. Each starts at the same entry quote after the account has returned to cash; each uses 20 units and ends with a complete sale. This is a controlled arithmetic comparison, with no compounding or claim that markets supply 50 such opportunities.
Across those episodes, purchases total 100,020 USDT and sales total 100,100 USDT. Combined execution turnover is 200,120 USDT. Gross fill-price gains total 80 USDT, commissions total 120.072 USDT, and the net result is a loss of 40.072 USDT.
The account does not need to hold 200,120 USDT at once to generate that turnover. Capital can be reused after each close, while another commission is charged on each execution. Do not express the loss as a percentage of account equity without specifying the account balance and capital committed.
Actual activity will have different sizes, spreads and outcomes. Sum the fill ledger rather than multiplying a headline fee by an ambiguous trade count. When comparing holding styles, the day trading versus swing trading workload comparison adds monitoring and exposure questions that this execution calculation leaves open.
Build a cost worksheet that survives real fills
Use the following sequence before accepting a small modeled gross gain as a usable result:
- Name the scope. Record pair, venue, product, direction, intended size, quote currency and what counts as a completed round trip. This buy-then-sell spot model does not cover every short instrument. The hedging versus shorting comparison separates the position's purpose from its direction.
- Save the quote and benchmark. Retain bid, ask, sizes and timestamps at the decision and execution stages. Mark a stale or incomplete snapshot. A chart's last trade does not establish the current midpoint, and neither observation guarantees a fill at the required size.
- Use distinct fills. Keep quantity, price, liquidity role, commission amount and fee asset for every fill. Reconcile the total bought and sold. If an exit is incomplete, report the remaining inventory and its valuation separately from the closed cash result.
- Reconcile fee assets. The examples assume quote-currency commission. Binance Spot documents received-asset deductions and conditional payment using a separate discount asset. A buy fee deducted in base can reduce sellable quantity; a fee paid in another asset still has a cost. Choose a stated conversion method and avoid both reducing inventory and charging that same fee twice. Binance Spot commission calculations.
- Stress the execution assumptions. Recompute with a wider exit spread, lower filled size, maker rejection and a taker close. Add applicable funding, borrowing or fixed costs separately. Do not extend the same-quantity cash equation to a different contract payoff without checking its units.
Keep the conditional hurdle beside the actual net cash result. If a small move only clears costs when both maker orders fill at favorable quotes, those fills are a central assumption to validate before increasing trade frequency.