Trading Choices: The Trade-off Between Win Rate and Profit-Loss Ratio

In the trading field, many people fail to think deeply, resulting in vague plans, wavering positions, and unclear goals, ultimately leading to significant losses in a panic over minor issues. In fact, the win rate and profit-loss ratio usually offer only a binary choice; clarifying this choice is key to trading success.

Pursuing a high win rate requires adopting quick and decisive strategies, achieving goals, and exiting promptly. For instance, when facing a profit space of 5000 points, only capturing 2000 points, quickly closing, and seeking new opportunities the next day. Large profits can be achieved through phased exits and leveraging remaining positions after floating profits. However, a high win rate comes at a cost; it may lead to missing out on major market movements and potentially enduring losses by widening stop-loss distances, which requires traders to discern the 'necessary moments' themselves. Therefore, before choosing a high win rate, one must be clear about the costs, make a solid plan, and understand personal needs, operational methods, and the psychological preparedness for accepting risks and missing market opportunities.

Conversely, a high profit-loss ratio pursues low frequency, trends, and large spaces. However, trends do not always exist, and traders pursuing a high profit-loss ratio often face profit retracement, even turning profitable orders into losses. This demands strong psychological qualities from traders, as they must endure multiple trials and errors since they may face setbacks before correctly identifying trends, leading many to fall just before dawn. Thus, to become a qualified trend trader, patience is the primary quality.

In reality, most people have not considered this issue. They panic and exit and re-enter profitable orders, with the second entry not being part of the plan, resulting in losses and physical strain. Alternatively, after multiple profits, failing to exit in time, long-term plans collapse due to profit retracement, leading to heavy short positions or missing out on significant trends due to fears of profit retracement, ultimately regretting the decisions made. This either stems from a lack of thought or having a plan but failing to execute it strictly. The path of trading requires deep reflection and steadfast execution to go far.

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