Cut off losses and let profits run. The meaning of this sentence itself is to advocate a high profit-loss ratio for transactions.

What is profit-loss ratio?

Profit/loss ratio is a very simple concept. Take tossing a coin to guess the outcome as an example. If you guess right, you win one dollar, and if you guess wrong, you lose one dollar. The profit-loss ratio is 1:1. If you guess right, you win three dollars. If you guess wrong, you lose one dollar. The profit-loss ratio is 3:1. .

In trading, every correct transaction makes a profit of three, and every wrong transaction loses one, with a profit-loss ratio of 3:1.

There are several specific situations of profit-loss ratio in actual combat:

The first type: fixed point profit and loss ratio

The stop loss is 50 points each time, and the profit is set to 100 points. As long as each transaction adopts the trading logic of a fixed position; the profit and loss ratio is 1:2, and as long as the success rate reaches 33%, the account can reach a profit and loss balance.

Second type: Fixed profit and loss amount

The stop loss of each transaction is 100 US dollars, and the profit is set to 200 US dollars, with a profit-loss ratio of 1:2. The position is adjusted according to different stop loss spaces; the proportion of stop loss points is the same every time, but the number of stop loss points is not fixed. Similarly, as long as the success rate reaches 33%, the account can reach a profit and loss balance.

The third type: trading logic of dynamic exit

The stop loss is fixed or dynamic, but the take profit must be dynamic, and the profit and loss ratio changes.

For example, the exit logic that is often used: follow the trend with turning points, follow the trend with trend lines, or follow the trend with moving averages; this is the real trading logic that allows profits to run. The profit-loss ratio of such an exit is dynamic.

Many times, the profit-loss ratio may be unreasonable and the success rate is very low. However, once you encounter a very big trend, you will get a very high-quality profit-loss ratio, and you can recover the previous losses by relying on one or two large profits with a high profit-loss ratio.

So is there any way to improve the success rate of executing the profit-loss ratio?

1. Choose more trend trading, that is, trading on the right side, when a level of 1 o'clock or 4 o'clock comes out of the trifurcated resonance (MACD strategy, shared in the previous article)

2. Adopt the method of building positions in batches and find key support levels to take action. After completing the position building, set the stop profit and stop loss and wait for the market to give the result. Do not make random changes or operate frequently in the middle.

3. Adopt a profit-taking strategy at the midline of the price parallel channel (if you are interested, you can leave a message and I will share this strategy later)

4. Control positions and cycles. Based on the resonance results of trend lines, moving averages, RSI, Boll and other indicators, game the unilateral market within a certain period, and adopt dynamic stop-profits to game for a higher profit-loss ratio and success rate!

The above summary comes from the exclusive summary of those who lead the way and become rich! #合约锦标赛 #crypto2023 #原创币安