'Is a high win rate a genius trader?'

Young people, if you think this way, then you are not far from blowing your account!

Today, the master of local currency tells you what the core indicator is to verify whether a trading strategy is correct.

Recently, the master of local currency has seen many young people discussing a topic in Binance Square: Is win rate important, profit-loss ratio important, or is preventing maximum drawdown more important?

Have young people noticed that some people have an 80% win rate, but their accounts are suffering significant losses; while others have only a 30% win rate, yet their accounts are quietly soaring?

Why is this?

Today, the master of local currency has time, so I’ll type a few words to clarify for the young people: what indicators should truly be focused on in trading.

One, win rate: this thing looks sexy, but deliberately pursuing it is undoubtedly an attempt to build a high-rise without a foundation in a sandy area; one day, a storm will come and destroy everything.

Many young traders, when first learning trading, are brainwashed by 'high win rates', thinking that as long as they win more times than they lose, they can make money.

But the truth is: a high win rate does not equal making money.

For example:

  • 90% win rate, but only earning 10U each time, occasionally losing 1000U.

  • Do you think you can make money?A single big loss is enough to wipe out dozens of small gains.

A high win rate can easily tempt young people into greedily not setting stop losses, ultimately leading to being killed by one-sided market trends; such market conditions typically occur once every three months on average, sometimes even more frequently.

Two, profit-loss ratio: indeed the core of making real money, but don’t blindly believe it first!

Profit-loss ratio refers to how much you earn and lose for every winning trade.

For example:

  • You may have a 30% win rate, but if you earn 200U each time and only lose 50U, you can still make long-term profits.

This is the essence of trend trading: capturing big market movements and tolerating multiple small stop losses. For example, the master of local currency can accurately predict spikes with an average error within 200 points, capturing at least 2000 points. This means the master of local currency can afford to stop loss ten times at 200 points; as long as they capture one, they won't lose. I can usually make a successful prediction within three attempts. This is the most important core.


But note: if the profit-loss ratio is too large, the win rate will be very low, and newcomers may struggle to withstand consecutive losses. Enjoying stop losses and treating them as earnings is a psychological barrier that young traders must overcome.



Three, maximum drawdown: if you don't control it, it will control you.


Maximum drawdown refers to how much the account has lost from its highest point to its lowest point.

Many young people are addicted to 'short-term explosive profits', but ignore the stability of their accounts; eventually, when a round of drawdown occurs, not only do they blow their accounts, but they also lose their confidence.

Young people, remember this phrase from the master of local currency:


Only trading systems that can survive for a long time are qualified to discuss making money through compound interest.


Controlling drawdowns well is a prerequisite for discussing long-term compound interest.



Four, what you really should focus on are these two things:


1. Expected Value


Formula:



Win Rate × Average Profit - Loss Rate × Average Loss


As long as this value is positive in the long term, young people are in a 'probability advantage'.

This is more comprehensive than simply looking at win rates or profit-loss ratios.


2. System Stability (Executable)


The master of local currency has seen too many strategies, with beautiful data, but collapses when it comes to real trading.

The reason is — inability to execute, psychological pressure, and frequent failures.


No matter how perfect a strategy is, if you can't withstand consecutive losses and can't follow through long-term, it's useless to you.



Written at the end

Young people, stop fixating on those phrases like 'high win rate leads to flying' and 'double your money overnight'; the further you stay away from a 100% win rate, the better!

True experts rely on systems with long-term positive expectations, controllable drawdowns, and stable mindsets.


Don't be a slave to the market; be a friend to probability.

This is the only right path to trading freedom.


Author: Beacon of the Currency Sea · Eastern Saint

Follow the master of local currency, like and share with your friends, and jointly build a correct trading mindset system.