Which of the three strategies with the same expected value do you prefer?

I pondered for a while. I feel that this topic is not so simple. After thinking about it a little bit, this is obviously a question of the ratio of winning rate to profit and loss.

The winning rate of category A is 20%, and the profit and loss ratio is 4.5:1

The winning rate of class B is 50%, and the profit and loss ratio is 3:1

The winning rate of class C is 80%, and the profit-loss ratio is 2:3, which is almost 0.67:1

Although from a purely mathematical point of view, the final results of these three strategies are exactly the same. But this is only on a one-time basis.

At this point, the problem is actually obvious, that is, the choice between low winning rate and high profit-loss ratio and high winning rate and low profit-loss ratio.

In fact, to be honest, the issue of winning percentage and profit-loss ratio has been debated for a long time, so long that I am a little bored myself. I did not expect to encounter this issue again today. Well, let me simply state my point of view.

In my opinion, the winning percentage is the winning percentage, and the profit-loss ratio is the profit-loss ratio. But in the actual process, for a person with a high winning rate, his profit-loss ratio may not be the best, but it must not be unreasonable. At best, it is a mean, for example, if you earn once, you can lose twice. The profit-loss ratio of 2:1 is definitely not high, but can you say it is unreasonable? But it can't stand the high winning rate. Note that the high winning rate I am talking about here refers to honest short-term orders. It's not about placing an order and running away after earning a few points. In my opinion, this is not an order. That's billing. Therefore, a high winning rate is actually a way to reduce losses and increase profits in disguise.
That's why I said that people with a high winning rate actually have an upper-middle profit-loss ratio. The base of such people making money is definitely lower than the winning rate, but there are many people with a high profit-loss ratio. This is absolutely the case.
I don't know when it started, but the words of high winning rate and low profit-loss ratio, low winning rate and high profit-loss ratio have been spread. In my opinion, this is simply nonsense. Is it true that a high winning rate trader is a Chinese cabbage, good luck? Others have a high winning rate from fighting in the market, okay, don't you understand what the profit-loss ratio means? Give me a break. Therefore, in actual trading, even if a person with an 80% winning rate like Category C trades with his eyes closed, his profit-loss ratio cannot be such an unreasonable match of 2:3.

What's even more funny is that I actually saw a lot of people with low winning rate and high profit-loss ratio, laughing at people with high winning rate, but the profit-loss ratio is not as high as them. I feel that their trading ideas are wrong, pursuing the winning rate but giving up the profit-loss ratio. . . . I really do. . . . Ten thousand horses galloped by. These people really don't know how to trade.

How high is a high profit-loss ratio? 3:1 or 4:1, or 5:1? ? or above? ? At present, the mainstream way to achieve a high profit-loss ratio is nothing more than reducing the stop loss or increasing the profit.

Well, take gold, which is the most volatile. The normal volatility of gold is 13--15 US dollars. Just $15. Abnormal situations are not discussed, it is too crazy. Generally for gold, a stop loss of $4 is considered a normal stop loss. Let's say it's small, and the normal stop loss is 3 US dollars.

Let's look at the profit-loss ratio. Even with a profit-loss ratio of 3:1, the profit has reached $9. A volatility of 15 US dollars, eating 9 US dollars, it seems normal to calculate this way, but is it really calculated like this?

Cutting the head and tail, under normal circumstances, eating up the market of $9 in gold is already considered very awesome. A profit-loss ratio of 4:1 or 5:1 is simply a breakthrough in the sky, and I dare not think about it. Is there such a profit-loss ratio? Yes, but only on long lines. Or to put it another way, this kind of profit-loss ratio is the norm in the long-term.

Therefore, it is obvious that a high profit-loss ratio is not suitable for short-term, or most of the market conditions cannot reach a high profit-loss ratio. For 90% of people who eat melons, the short-term is the focus of trading. Medium and long term? Sorry, haven't seen one. Note that what is mentioned here is the real medium and long-term, which is the kind of one that can last for half a year, a year or even several years. This kind of situation is very common in the stock market. How many people have seen it in the foreign exchange market? ?

Among the people with low winning rate and high profit-loss ratio, are there any people who make money? have. But this kind of person will not laugh at someone with a high winning rate. Because they understand that it's just a matter of choice.
It's a bit far-fetched, can a high winning rate and a high profit-loss ratio have both? I can give a clear answer: no.
The first thing you need to know is the delay of the profit-loss ratio. Well, the reason why I say it is delayed is because the profit-loss ratio is often calculated after a transaction, or after a period of trading. Why post-trade statistics? Because it is uncontrollable. Who dares to say that if I go in, I must reach the profit-loss ratio of XX:XX? Who can guarantee? Do you dare to stick to this, and never enter the field until the profit and loss ratio target? The result speaks for itself. That's why I said that the profit-loss ratio is uncontrollable and delayed. As for the proof, it is very simple. Divide your transaction records into several parts at will, and make statistics by segments, and you can see if your profit-loss ratio is consistent. If it is several years, then use years as the unit. See if it's the same every year.
Maybe a certain market is an opportunity for you to make money. I believe everyone has this kind of market, which is commonly known as a good market. Under this kind of market, the probability of your profit and loss ratio is definitely higher than usual, and it is not even ruled out that it will exceed a lot. But this kind of market is rare.
So, how do you guarantee the profit-loss ratio? Losses are guaranteed, but profits? Well, in the case of guaranteed losses, if the winning rate is not high, it will also lower the profit-loss ratio. If the profit is not ideal, then the profit-loss ratio is simply impossible to see. So let the profits run wild and the losses cut off, I think it is quite appropriate. But the result is that the winning rate is not high.
At present, the more popular or effective methods only start from the operation method and transaction logic. But the transaction itself is a matter of planning and success. Therefore, the profit-loss ratio is essentially not guaranteed at all.
As for the winning rate, although this thing is not guaranteed. However, it is slightly different from the non-guaranteed ratio of profit and loss. The winning rate is as long as it can make a profit, it will be a real increase. The profit-loss ratio is not only profitable, but also needs to reach a certain amount.
I wondered, is it because there are more novices who have been doing ultra-short-term in recent years, they run away when they make a few points, and die when they lose money, so the winning rate is quite high, but the losses are also quite a lot. So there is a seemingly weird saying that the winning rate is high and the profit-loss ratio is low? For a person who can really achieve a high winning rate, his profit-loss ratio is absolutely impossible, although it is not high.

Finally, let me talk about myself, I am actually a type B trader. However, it is slightly different, the winning rate is higher, but the profit and loss ratio is lower. The average is 2:1.

The prerequisites for this question are the success rate and loss value, for a mature trading strategy. This question does not hold. Because of a mature trading strategy, the success rate is the first condition, but it is far from enough, because whether the successful stop profit can cover the loss exit is the key point. It is not enough to have these, the management of funds is also very important. I once met a boss of an organization. He said the key points in one sentence. No matter how good the strategy is, the proportion of funds is very important. Give you 100 million, open 0.01 per order. Are you going to liquidate? No, but it still does not meet the requirements of the rate of return. Give you 1 million, and you open 100 hands each time, that is to gamble, and institutions will not accept it. Of course, except for pure game thinking. If you want to go long-term in this market, you must have a certain game thinking, and more importantly, control the risk value and return. For institutions, an annual return of more than 50% is already impressive. Don't gamble, otherwise the road will not go long. Treat the market as a casino, and you will leave the market as soon as you are happy. Therefore, I hope it will be of some help to everyone in their trading ideas.