The Trader's Breakthrough: How to Escape the Death Loop of Small Gains and Big Losses?
Have you also experienced such torment?
You just made a 5% profit and are eager to cash out, only to miss the subsequent 50% surge.
But when facing losses, you stubbornly hold on, ultimately forced to cut losses at the lowest point.
It's like an endless cycle where small gains leave you only sipping soup in a bull market, while your mindset causes you to be devoured down to the bone in a bear market.
The secret of top traders: It's not about prediction, it's about math.
Real winners don't rely on accurate predictions, but instead calculate clearly:
With a risk-reward ratio of 3:1, you only need a 34% win rate to break even.
Yet most people chase a 1:1 trade, forcing themselves to achieve a 50% win rate just to avoid losses.
Here’s the question:
If in 10 trades:
6 small losses (-5%)
3 breakeven (0%)
But as long as there’s 1 big win (+15%)
You still come out ahead!
Why can 99% of people not achieve this?
Because human nature despises torment:
Watching profits evaporate is more painful than facing losses.
The temptation to cash out at breakeven is always greater than letting profits run.
Before placing your next trade, use this "prisoner's dilemma" to interrogate yourself:
If my stop loss is 5%, then where should my take profit be set at at least ___%?
The answer lies in the math of risk-reward ratio. Want to know the specific strategy? Come talk to me.
The tragedy of retail investors lies in the fact that they would rather repeatedly cycle between the "joy of making 5%" and the "regret of losing 20%" than endure the racing heartbeat of holding a position.