Why is the ratio 1,000 times more important than a high profit percentage?

robot
Abstract generation in progress

Let’s review together… How many times have you seen an ad saying “Earn 2000% from a single trade”? A lot, right?

The strange thing is that most of these ads are completely misleading. The problem is that new traders get fooled easily.

The problem: Big numbers are a trick

When you see an ad saying “Earn 2000%”, it often ignores the fine print: What are the risks?

Imagine this:

  • You open a trade aiming for +2000%
  • But the Stop Loss is extremely far away
  • The result? The actual Risk-Reward Ratio is 1:1 or worse

So if you lose the trade? You could lose all the profits you made from 10 winning trades.

That’s not trading, that’s disguised gambling.

The solution: Focus on the Ratio, not the profit percentage

The real measure is the Risk-Reward Ratio:

1:2 = risk 1 to earn 2
1:3 = risk 1 to earn 3

This Ratio means that:

  • Even if you lose 4 out of 10 trades
  • Your overall profitability stays positive in the long run

But if your Ratio is 1:1 or less? Every losing trade wipes out the money from a winning trade, and the result = impossible to achieve sustainable profits.

The hard truth

“Unbelievable profit” ads usually use a very weak Ratio. Marketers know big numbers grab attention, so they forget to mention the real risk.

How do you protect yourself?

  1. Ask yourself before any trade: What is the exact Risk-Reward Ratio?
  2. Ignore the profit percentage if it’s not accompanied by a strong Ratio (1:2 and above)
  3. Focus on the long-term strategy, not just a single trade

A strong ratio = sustainable profits. Period.

Bottom line: Don’t get swept away by the promise of a single big number. The real hero is the Ratio, and profits come in the long term when you set a reasonable risk percentage.

View Original
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
  • Reward
  • Comment
  • Repost
  • Share
Comment
0/400
No comments
  • Pin
Trade Crypto Anywhere Anytime
qrCode
Scan to download Gate App
Community
  • 简体中文
  • English
  • Tiếng Việt
  • 繁體中文
  • Español
  • Русский
  • Français (Afrique)
  • Português (Portugal)
  • Bahasa Indonesia
  • 日本語
  • بالعربية
  • Українська
  • Português (Brasil)