Under the concept of "take profit and stop loss" in the previous article, the problem of how to grasp the ratio of take profit and stop loss will be extended.

Similarly, when you think there will be a reversal at a certain point, you will want to step in and trade.

So when making a transaction at the market price, the general handling fee is about 0.1%. After accounting for slippage, the handling fee may be between 0.1% and 0.13%.

If we use the large value to calculate the position, we will have a loss of 0.13%.

Next, let’s discuss the methods of taking profit and stop loss.

1. Set your preset reversal point 1% below as a stop loss.

1-1. Assume that the take-profit is set to 1% upward as the take-profit, then the profit-loss ratio at this time is 1/1.13, which is approximately 0.885.

1-1-1. When the winning rate is lower than 50%, the principal will continue to be lost and gradually return to zero.

1-1-2. When the winning rate is greater than 51%, the funds will slowly increase.

1-2. Assume that the take-profit is set upward by 1.5% as the take-profit, then the profit-loss ratio at this time is 1.5/1.13, which is approximately 1.327.

1-2-1. When the winning rate is 50%, the expected return of each transaction is approximately 0.184%

〔 (1+(0.015×0.5))÷(1+(0.0113×0.5))-1〕

1-2-2. When the winning rate is greater than 50%, the return is assuming that when the winning rate is 60%, the expected return per transaction is approximately 0.446%.

〔(1+(0.015×0.6))÷(1+(0.0113×0.4))-1〕

Therefore, we can see the importance of profit-loss ratio and winning rate.