Many people ask me: Can trading really achieve long-term stable profits?
If you persist in doing one thing long enough and often enough, the answer will gradually reveal itself.
Short-term markets actually have the potential for stable profits.
The key is not "how much you made right now," but rather that when your number of trades accumulates to a sufficient size, the results will automatically converge towards the true expected value of the strategy.
As long as the strategy's expected value is positive, profit is just a matter of time.
In zero-sum markets like futures and forex, some people make money in the long term while others continuously lose, essentially driven by the combination of win rate and profit-loss ratio.
Let me give a simple model.
If a strategy has a win rate of 40% and a profit-loss ratio of 2:1, then in one hundred trades, you can earn about 80 units, lose 60 units, and have a net profit of 20 units. When scaled up to thousands of trades, the results remain consistently upward.
However, if the win rate is only 20%, even if the profit-loss ratio is increased to 3:1, it will still end with a negative result under a large sample.
At that point, it’s not bad luck; it’s the strategy itself that is “consistently losing.”
The pace of short-term trading is very fast, with hundreds or thousands of trades in a year.
In the face of such a large sample, luck is just fleeting; ultimately, it all returns to mathematics.
The real key is how to find your own balance between win rate and profit-loss ratio.
The higher the profit-loss ratio, the lower the win rate tends to be; the higher the win rate, the profit-loss ratio will naturally be compressed.
What you need to adjust is that "long-term winning" golden line between the two.
However, saying it is easy, but doing it is extremely time-consuming.
Every stable strategy of my own takes an average of a year from research to finalization.
The success of trading has never been an overnight epiphany, but rather the accumulation after thousands of trial and error.
I hope you can also find your own positive expected value route soon.
