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✅ Best Math & Physics Scientific Formulas in Crypto Futures Trading

These formulas help you calculate risk, momentum, profitability, and market behavior—just like physics applies to real-world motion, but for the price movement of crypto!

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1️⃣ Risk-Reward Ratio (RRR)

This measures how much you risk versus how much you expect to gain. Risk-Reward Ratio=∣Entry Price−Stop Loss∣∣Take Profit−Entry Price∣\text{Risk-Reward Ratio} = \frac{|\text{Entry Price} – \text{Stop Loss}|}{|\text{Take Profit} – \text{Entry Price}|}

✅ Ideal RRR is 1:2 or better, meaning you risk $100 to make $200.

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2️⃣ Position Size Formula

Based on account size and risk per trade. \text{Position Size} = \frac{\text{Account Balance} \times \text{Risk %}}{|\text{Entry Price} – \text{Stop Loss}|}

✅ Example:

• $1,000 balance
• 1% risk = $10
• Entry $50,000, Stop Loss $49,800 (difference $200)
• Position Size = $10 / $200 = 0.05 BTC

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3️⃣ Leverage Formula

Control bigger positions with less capital. Leverage=Position SizeMargin Used\text{Leverage} = \frac{\text{Position Size}}{\text{Margin Used}}

✅ Example:

• $10,000 position
• $1,000 margin
• Leverage = 10x

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4️⃣ Momentum Formula (Physics Style)

In markets, price momentum is like physical momentum. Momentum (M)=Volume (V)×Price Change (ΔP)\text{Momentum (M)} = \text{Volume (V)} \times \text{Price Change (ΔP)}

✅ High momentum = strong moves.
Look for big volume with sharp price shifts.

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5️⃣ Volatility Formula (Standard Deviation σ)

Volatility measures how wildly price moves. σ=∑(xi−xˉ)2n\sigma = \sqrt{\frac{\sum (x_i – \bar{x})^2}{n}}

Where:

• xix_i = individual prices
• xˉ\bar{x} = average price
• nn = number of prices

✅ High volatility = wider stops, bigger profits.
Use tools like ATR (Average True Range) to simplify.

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6️⃣ Profit & Loss (P&L) Formula

PnL=(Exit Price−Entry Price)×Position Size\text{PnL} = (\text{Exit Price} – \text{Entry Price}) \times \text{Position Size}

For short positions, reverse it: PnL=(Entry Price−Exit Price)×Position Size\text{PnL} = (\text{Entry Price} – \text{Exit Price}) \times \text{Position Size}

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7️⃣ Funding Cost (Cost of Carry)

Funding Cost=Funding Rate×Position Size×Time HeldFunding Period\text{Funding Cost} = \text{Funding Rate} \times \text{Position Size} \times \frac{\text{Time Held}}{\text{Funding Period}}

✅ Crucial for longer scalps or swings in perpetual futures.

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8️⃣ Acceleration of Price (Physics Concept)

Just like acceleration = change in velocity over time,
price acceleration can be viewed as: Price Acceleration=Δ(Price Change)ΔTime\text{Price Acceleration} = \frac{\Delta (\text{Price Change})}{\Delta \text{Time}}

✅ Sharp acceleration = breakout signals.

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9️⃣ Sharpe Ratio (Profitability vs. Risk)

Sharpe Ratio=Average Return−Risk-Free RateStandard Deviation of Returns\text{Sharpe Ratio} = \frac{\text{Average Return} – \text{Risk-Free Rate}}{\text{Standard Deviation of Returns}}

✅ High Sharpe = better risk-adjusted performance.

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1️⃣0️⃣ Liquidity Density (Order Book Physics)

A rough idea for liquidity pressure: Liquidity Density=Total Bids or AsksPrice Range\text{Liquidity Density} = \frac{\text{Total Bids or Asks}}{\text{Price Range}}

✅ High density = strong support/resistance zones.

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🏆 How These Formulas Help in Crypto Futures:

✅ Size your trades correctly.
✅ Calculate exact profits and losses.
✅ Measure risk vs. reward like a pro.
✅ Predict breakouts with price acceleration.
✅ Manage funding fees and avoid hidden costs.
✅ Control volatility with proper stop-loss distances.

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💡 Bonus Tip:

These formulas can even be coded into trading bots or TradingView scripts for automated scalping, risk management, and alerts!

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Would you like me to create an Excel template or TradingView script that applies these formulas directly to your trading?