Trading Advancement: Beyond Bull and Bear Games, Constructing a Profit System Centered on Risk-Reward Ratio

Through long-term tempering in the market, I have gradually realized: the core of trading is not predicting the direction of the market, but building a risk management framework based on mathematical probability. This is a cognitive leap condensed from blood and tears experience:

Abandoning directional obsession, embracing profit and loss logic:

• The essence of the market is unpredictable: Being attached to the expectation of 'being right about bull or bear' often becomes a catalyst for emotional stop-loss.

• Trading is a probability game: The key is to capture opportunities with asymmetric return potential with limited controllable risk (such as 1 yuan).

Building quantifiable execution rules:

1. Ironclad risk control precondition: Backtrack position size based on the maximum acceptable loss per trade (strictly limited to within 1% of account net value).

2. Pursue risk-reward ratio: Set clear stop-loss points and profit targets, ensuring potential returns are at least 3 times the potential losses.

3. Accept tactical failures: Allow individual strategy losses, but insist on cutting losses, using the excess profits from a few successful trades to cover multiple small losses.

The essence of systematic practice:

• Mathematics replaces intuition: Use a rigorous 'expected value quantification formula' (Expected return = win rate * average profit - loss rate * average loss) to guide decisions, weakening subjective interference.

• Discipline over prediction: Abandon speculation on short-term market fluctuations, focusing on the mechanical execution of entry and exit conditions and the adherence to risk control discipline.

• Anti-fragility design: Systems built through risk-reward ratios inherently possess resilience against random fluctuations—relying not on a single correct judgment, but on long-term statistical advantages.

Insights for traders:

The ultimate liberation in trading comes from facing the uncertainty of the market and focusing on the risk management variables that one can control. If your trading decisions clearly include quantitative calculations of 'maximum possible loss per trade' and 'minimum target profit value,' you have embarked on the right path from emotional speculation to systematic profitability. True freedom lies in taming market chaos with rules.

Follow me, and I will help you see the essence through phenomena, together we will traverse through the bull and bear.