We can understand the abstraction of a trading system as:
Expected profit per trade = Win rate × Profit per win – Loss rate × Loss per trade, simplified to: the average amount earned per trade minus the amount lost per trade. Here, we consider three roles: 1. Retail investor: Win rate 45%, expected profit = 0.45 × 1.5 – 0.55 × 1 = +0.125
You can see that from retail investors to ordinary traders, a 5% increase in win rate doubles the profit, and a 10% increase in win rate results in a 200% increase in expected value. The gap is much larger than you might imagine...#金价突破5500美元
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We can understand the abstraction of a trading system as:
Expected profit per trade = Win rate × Profit per win – Loss rate × Loss per trade, simplified to: the average amount earned per trade minus the amount lost per trade.
Here, we consider three roles:
1. Retail investor: Win rate 45%, expected profit = 0.45 × 1.5 – 0.55 × 1 = +0.125
2. Ordinary trader: Win rate 50%, expected profit = 0.50 × 1.5 – 0.50 × 1 = +0.25
3. Professional trader: Win rate 55%, expected profit = 0.55 × 1.5 – 0.45 × 1 = +0.375
You can see that from retail investors to ordinary traders, a 5% increase in win rate doubles the profit, and a 10% increase in win rate results in a 200% increase in expected value. The gap is much larger than you might imagine...#金价突破5500美元