It is difficult to make money in trading, where is the difficulty?
Why are most people losing money?
Why do you make money for a while, but still lose money in the end?
Why does the trading model I made look good sometimes, but the result is still losing money?
Let’s talk about breakeven today .
This word is easy to understand, but this word is difficult to solve.
It can be said that basically none of the strategies available on the market can solve the problem of break-even.
Let's take the most common Martin as an example.
Can Martin make money? within the stage.
Can Martin make money all the time? Extremely difficult!
Why is it extremely difficult?
Many of you Martin have tried.
For example, I changed the stop loss to a smaller size.
500, at this time you will find that stop loss is very easy, right?
Then I will change it to 1000 at this time.
The stop loss is less, but there is still a stop loss
Then I will change to 3000, and the stop loss will be less.
So can I make money?
no……
Because the speed at which you make money cannot keep up with the speed at which you lose money.
When your stop loss reaches 500, you will lose less, but the stop loss is very frequent.
The stop loss is 3000, and the stop loss is less. But if you stop the loss once, you will not be able to earn back.
Then, some people will think, can I reduce the distance between positions and increase his earning speed?
Someone must have tried it.
The results of it? You will find that his fault tolerance rate has been reduced, making money faster, but the probability of stop loss is higher.
No matter how you debug, the end result is losing money.
what is the reason? It's breakeven.
The speed of making money, the size of the stop loss, the frequency of the stop loss, the fault tolerance rate... these sets of data will stump many people.
If the reconciliation is not good, the final result must be unsatisfactory.
Some people will say, as long as I make enough money in a limited time, I will leave the market, isn't it all right?
Novices who have played minesweeper games will know where the mines are! everywhere~
There is a word called Murphy's Law, which is not something you can avoid if you want to.
If you want to play Martin well, the above four conditions are indispensable. If you can't reconcile them well, you will find that you can't go on at all. Accidents and risks are everywhere.
We are talking about trends or many types of one order at a time.
Many people will find a phenomenon that if you suddenly change the number of hands, you will suffer a lot.
There are many strategies for one order at a time, which is floating single thinking.
What is a floating order means that the stop loss is very large and the take profit is very small. If you look at the account history, all the orders are profitable. If you look at the positions, you will see floating losses.
Many manual traders also have this problem, they leave when they make money, and carry it when they lose money. The results needless to say.
Everyone knows that this is definitely a loss, why? The profit and loss structure is out of balance. It is impossible to make a profit of 10 yuan and a loss of 100 yuan.
Then there is another approach, which is to take a small stop loss and a small stop profit.
When you look at the strategy model, the accuracy rate is very high, but when you actually run it, you lose money in a mess. Why is this so?
"cost"!
Costs account for the majority of profits.
For example, 100 stop profit, 100 stop loss, generally one profit and one loss, the loss is about 20. The more orders, the more losses.
That is to say, your cost occupies too much of your profit margin, and this structure is also very problematic.
The structural model seems to be fine.
However, the cost accounts for too much of the profit. If your cost exceeds 10% of the profit, the final result is generally not very good.
The result of any model actually has a corresponding algorithm ratio.
If the strategy model does not rely on the calculation of breakeven, it will definitely be a loss in the end, no matter how you do it.
Some people say that my winning rate is as high as 90%, but I lose money.
Some people say, why do I make money when I increase my position logarithmically, but I still lose money in the end?
Some people say that I do a good job in manual trading, but I don't make any money.
The root cause of everything is the balance of profit and loss!
Breakeven is a calculation problem.
Whether you trend, multi-currency martins, single-currency martins, or manual trading…
If you don't calculate the balance point in the middle, the final result must be a loss.
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