All lessons

Understand crypto before trading

1What is crypto trading? 2Blockchains, ledgers and consensus 3Bitcoin, Ethereum, coins and tokens 4Build a safe practice plan

Wallets and personal security

5Wallets, keys and custody 6Recovery phrases and backups 7Networks, addresses and transfers 8Phishing, approvals and scams

Understand the trading venue

9Centralized and decentralized venues 10Pairs, order books and spreads 11Spot orders and execution 12Fees, slippage and liquidity

Risk before returns

13Size a spot position 14Portfolio concentration and correlations 15Drawdown, R multiples and expectancy 16Stablecoins and counterparty risk

Read crypto market structure

17Candles and an around-the-clock market 18Trends, ranges and price levels 19Breakouts, volume and confirmation 20Indicators and volatility

Apply chart frameworks to crypto

21Dow-style structure: what would change your view? 22Wyckoff in spot crypto: read the range carefully 23Elliott counts: keep an alternative on the page 24Liquidity sweeps: separate the wick from the story 25FVG and OTE: transfer the rules, not the promises

Understand asset economics

26Supply, market cap and FDV 27Token unlocks and distribution 28Network activity and on-chain data 29Research a project critically

Understand derivatives before considering them

30Spot, futures and perpetual contracts 31Funding, basis and mark price 32Margin, leverage and liquidation 33Open interest and liquidation data

Derivatives through paper examples

34Linear perpetual P&L: calculate the money, not the excitement 35Collateral and liquidation: a deliberately simplified worksheet 36Funding carry: count what you keep 37Dated futures: follow both sides of the hedge 38Calls and puts: payoff is not profit

Explore DeFi with caution

39Smart contracts and applications 40AMM pools and price impact 41Liquidity provision and changing asset value 42Staking, lending and bridges

Understand ecosystem risks

43Constant-product AMMs: calculate the moving price 44LP divergence loss: choose the right comparison 45Reorgs, bridges and L2s: what is actually final? 46MEV and arbitrage: subtract the competition 47DEX approvals: inspect before you sign

Build and test market hypotheses

48Market context and catalysts 49Write a setup rulebook 50Profiles, order flow and SMC limits 51Backtest crypto data honestly

Research, allocation and review

52Token vesting: size the unlock, then ask why 53On-chain metrics: count activity, not stories 54Stablecoin depeg: map access, not just reserves 55Rebalancing: weights change even when you do nothing 56Advanced crypto capstone: defend the whole plan

Practice, review and stay informed

57Paper trade and keep a journal 58FOMO and decision routines 59Records, local rules and changing information 60Capstone: research and risk plan

34 / 60

Linear perpetual P&L: calculate the money, not the excitement

3 min read

A platform shows a large percentage. How many quote units did you actually make or lose?

Here is what we will figure out

Calculate a linear perpetual result and separate it from margin-based ROI.

A linear contract's payoff changes proportionally with the underlying price under its contract specification. For a long, gross P&L is base-equivalent quantity multiplied by exit minus entry; reverse the difference for a short.

Check whether the order size is tokens, contracts or quote value. A contract multiplier may be needed before using the formula. Do not apply this simple calculation to inverse contracts or products with different settlement rules.

Subtract actual trading fees and funding paid, and add funding received where applicable. Unrealized P&L based on a displayed price is a valuation, not a guaranteed amount obtainable by closing.

Leverage changes the collateral supporting the exposure. For the same quantity and prices it does not add another multiplication to P&L. A high margin-based ROI can coexist with a modest price move and substantial liquidation risk.

Let’s work through it

Convert contracts into base-equivalent quantity.
Calculate gross P&L with the correct long/short sign.
Apply costs and label both P&L currency and ROI denominator.

Let’s use numbers · hypothetical example

Paper long: 0.2 coin at 2,000, closed 2,050. Gross P&L=0.2×50=10 quote units. Total trading fees 1.20 and funding paid 0.30 leave 8.50. At 10:1, simplified opening margin on 400 notional is 40; gross ROI 25% is not a 25% coin-price gain.

Easy mistakes to watch for

Multiplying P&L by leverage again.
Confusing contracts with token quantity.
Reporting gross ROI while hiding fees and funding.

Keep in mind

Real margin, fees and settlement vary. This is a linear paper example, not an instruction to open leverage.

Your turn

Recalculate the same position exiting at 1,950 with the same costs, then compare the cash result and margin percentage.

A quick check before we move on

What is net P&L in the worked long example?

8.50 quote units
100 quote units
25 coin units

Check answer

8.50 quote units Gross 10 minus 1.20 fees and 0.30 funding equals 8.50; leverage is not an additional P&L multiplier.

Sources and further reading

Content reviewed: 29 October 2026