In trading, which aspect do you focus on more?
High win rate!
High frequency!
High profit and loss ratio!
High-frequency trading must achieve a high win rate, such as intraday short-term trading!
If there is no high win rate for high frequency, it is difficult to achieve stable profits!
And it is impossible to achieve a high profit and loss ratio with high frequency!
However, the actual result is that a high win rate is difficult to achieve. In the long run, there is not much difference between the probability of flipping a coin and the probability of flipping a coin, and it is difficult to exceed 50%
Then conversely, since the pursuit of a high win rate is difficult to achieve, high-frequency trading does not exist rationally!
As a result, only the high profit and loss ratio is left.
Only a high profit and loss ratio can fight against a low win rate!
1. Assuming that the profit and loss ratio of each time is 1 to 2, 4 out of 10 transactions are successful and profitable, which is 8, and 6 failures are losses of 6! This is not a loss!
2. The profit and loss ratio reaches 1 to 3, and 4 out of 10 transactions are profitable, which is 12! 6 losses are exchanged for 6, so it is definitely profitable!
3. The profit-loss ratio reaches 1 to 5! 3 out of 10 transactions are profitable! It is 15, and 7 losses are 7! This is definitely profitable!
The conclusion is that the higher the profit-loss ratio, the better it can fight against low winning rates!
Select a period, such as 4 hours!
Fix the stop loss amount each time, so that the position is calculable! The profit-loss ratio of the transaction result is also calculable
Then there is a standard, and there will be a statistical result of long-term trading! Let the data speak!
If the direction of effort is wrong, no matter how hard you work, it will be counterproductive!
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