The concept of profit-loss ratio is not difficult to understand
But many people ask me
For example: #BTC☀
For example, if you short at 61,000, the stop loss is set at 62,000 and the take profit is set at 60,400. In this case, the risk of losing 1,000 yuan corresponds to a profit of 600 yuan. The profit-loss ratio calculated in this way is 1:0.6, that is, for every risk of losing 1 yuan, you can get 0.6 yuan in profit.
This seems to be uneconomical, but the actual situation is more complicated. The profit-loss ratio is only part of the trading strategy, and it cannot be used alone to judge the quality of the transaction. Perhaps in the market, you may find that the market trend is blocked and cannot break through as expected, then it is a wise choice to close the position manually in time. In this case, the calculation of the profit-loss ratio may not be completely applicable.
It is worth noting that the profit-loss ratio is only a reference indicator, not an absolute standard. If you rush to stop profit every time you see a slight fluctuation in the market trend, you may miss the opportunity to get greater profits.
This is also a common phenomenon: some people start to worry because they make a small amount of money, while others can bear large losses and think they can "fight back". These examples show that a single profit and loss ratio cannot fully reflect the value and effect of the transaction.
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