$BTC Next Step Trading Plan——1125
Last night's 2:1 profit-loss ratio order was stopped out
Here, I would like to take this opportunity to discuss the fundamentals of stable profitability in the trading market, mainly based on mathematical expectation. Suppose a person's trading style is relatively conservative, always entering long positions after seeing a breakout of a large bullish candle or short positions after a bearish candle breaks. Such right-side orders come with reduced profit potential, mostly at a 1:1 profit-loss ratio. If a trader primarily focuses on 1:1 profit-loss ratio orders + maintains a consistent position size for each trade, then as long as their win rate exceeds 50%, they can achieve stable profitability.
If a trader's main style focuses on 2:1 profit-loss ratio orders, then as long as their win rate exceeds 40%, they can achieve long-term stable profitability.
Based on the above, every time your win rate increases by 1%, it will make your profit curve steeper, meaning you earn more. This is what top traders can achieve, and I am currently in the process of improving my win rate. According to this mathematical expectation, if someone claims their left-side win rate is at 70%, you just need to realize how absurd it is. Left-side orders represent trading against the trend; the advantage is a very good profit-loss ratio, but the disadvantage is a very low win rate. This is how logical thinking can help discern whether what someone says is truthful or deceptive.
Therefore, win rate is core, but not the only factor. What is important is to maintain the same position size and control the profit-loss ratio most of the time + maintain a stable mindset.
For BTC, it is currently in a consolidation range, and the first low and high points of this range are very important. If there is no second low point retest and it breaks instead, I will re-enter short positions from the top to define the high point, taking short-term longs and waiting for the day session to unfold before considering entry points.
Taking advantage of the rebound, I have already converted all spot holdings into BTC; I'm done with the dog coins.
Done
