0️⃣4️⃣<Yu Sanshui> Trading Framework Series Tutorial No. 4 - "How to Choose the Right Box to Enter the Market"
The first three tutorials have combined the basic theories needed for the entire trading framework with real trading.
Now let's talk about how to choose the right profit and loss ratio. Before making a trade, you must first know whether the profit and loss ratio of this trade is suitable for entering the market.
The main trading method cited in this article is the 1️⃣ entry method in the second tutorial.
First of all, I personally think that when choosing to enter the market at the lower or upper boundary of the box, do not choose a box with a small space. Under the same stop loss, the smaller the box, the lower the cost performance.
I explain it in the form of pictures and texts, and $STX is used as a real-time demonstration example. First look at the theoretical picture on the left, and then look at the real-time demonstration picture on the right. I won't say much about the rest, the essence is in the picture.
Normally
2 wins and 1 loss is equivalent to a net profit of 1 round, which is a 1:1 profit-loss ratio
2 wins and 1 loss is equivalent to a net profit of 2X2-1 = 3 rounds, which is a 1:2 profit-loss ratio
This is if you only do a single coin, you can calculate it this way, but if you do different currencies, it is not easy to calculate it this way, some of which fluctuate greatly, and some fluctuate less, so you can deliberately control your stop loss area within 5-10%.
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