There are two key points in trading: first is the win rate, how many times you are right in 10 trades; second is the profit-loss ratio, which is the average profit and loss per trade. Our study of trading focuses on these two factors: either improve the win rate or improve the profit-loss ratio. The core of all thinking revolves around these two elements.
Some people may not clearly understand the difference between gambling and futures. Gambling and futures have similarities and differences. Gambling is actually very simple; you either bet high or low, which can be called gambling. Its win rate is around 50%, and its profit-loss ratio is about the same as the win rate, so gambling is "high risk, high reward; low risk, low reward."
Futures also involves "high risk, high reward; low risk, low reward," but it also includes "high risk, low reward; low risk, high reward." Therefore, we need to find opportunities for "low risk, high reward" among these four categories.
The method to improve the win rate is to do your homework and try to ensure the correctness of directional research. The trading plan should be as close to the direction as possible.
In fact, upon reflection, most of my trades are unnecessary trades, quite casual. What we need to do is try to minimize these unnecessary trades. Those who are disciplined tend to perform better in this regard, just like the current "shopping addicts"; they shop casually and make purchases at will, knowing that some items can be bought or not. Additionally, maintaining a good state is important; if you are always sleepless and confused all day, it will also lower your win rate. In summary, doing your homework + reducing unnecessary trades + maintaining a good state can improve your win rate.
Improving the profit-loss ratio means tightening stop losses and capturing the main trend. Try to make each trade's stop loss smaller, but this can also lead to missing trends, so setting stop losses is very skillful as it determines your entry timing. Capturing the main trend means waiting for the trend to emerge before placing trades.
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