What is the optimal combination of the risk-reward ratio and win rate?
Some people think their win rate isn't good enough, so they focus on the risk-reward ratio, aiming to make a three or five times profit on each trade, even if they only win two or three times out of ten. Others prefer a high win rate, taking profits quickly and just wanting that "frequent winning" feeling. No matter which path you choose, you must stick to a bottom line: risk-reward ratio × win rate > 1. In the long run, this is the starting point for profitability. For example, if you earn twice as much as you lose on average (risk-reward ratio 2:1), then your win rate only needs to exceed 33% to survive; if it reaches 40%, your strategy is already steadily profitable. Therefore, neither is inherently better or worse; it all depends on how well they match your trading style. None of us are gods; it's difficult to have both a high win rate and large odds at the same time, but it's entirely possible to find a suitable balance and cross that "break-even point." This is also why many people see the right direction but still lose money; or win multiple times, only to wipe out their gains with one big loss. Next time you plan a trade, ask yourself: am I relying on a high win rate or high odds?
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What is the optimal combination of the risk-reward ratio and win rate?
Some people think their win rate isn't good enough, so they focus on the risk-reward ratio, aiming to make a three or five times profit on each trade, even if they only win two or three times out of ten. Others prefer a high win rate, taking profits quickly and just wanting that "frequent winning" feeling.
No matter which path you choose, you must stick to a bottom line: risk-reward ratio × win rate > 1. In the long run, this is the starting point for profitability.
For example, if you earn twice as much as you lose on average (risk-reward ratio 2:1), then your win rate only needs to exceed 33% to survive; if it reaches 40%, your strategy is already steadily profitable.
Therefore, neither is inherently better or worse; it all depends on how well they match your trading style. None of us are gods; it's difficult to have both a high win rate and large odds at the same time, but it's entirely possible to find a suitable balance and cross that "break-even point."
This is also why many people see the right direction but still lose money; or win multiple times, only to wipe out their gains with one big loss.
Next time you plan a trade, ask yourself: am I relying on a high win rate or high odds?