Win Rate and Profit-Loss Ratio: The Art of Balancing Risk and Reward
In the arena of contract trading, many beginners are often misled by appearances, blindly pursuing a "high win rate".
They believe that as long as the accuracy of their trades reaches 80% or even over 90%, they can secure their success and financial freedom is just around the corner.
To achieve this goal, they may frequently cut losses on small losses, hesitate to let profits run, and even exit early at the slightest indication of a wrong direction. However, the cruelty of the market lies in the fact that a purely high win rate, if accompanied by an extremely low profit-loss ratio (i.e., earning little on each winning trade while losing a lot on each losing trade),
will ultimately lead to account losses and psychological exhaustion.
True professional traders understand that the art of trading lies in the clever balance between win rate and profit-loss ratio. Using small stop losses to aim for large profits is the true secret to achieving long-term stable profitability.
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