Having reviewed hundreds of trading documents repeatedly, I finally found the common weakness that beginners most frequently make.

Among friends who have just entered the crypto space, many have trading records that look quite impressive—win rates easily exceeding 70%, like a victorious general. But if you look at their account balances, they are gradually shrinking. In contrast, some veterans have win rates even below 40%, yet their account curves are steadily upward.

The answer to this paradox lies in a number: the risk-reward ratio. That is, the ratio between how much you earn when you win and how much you lose when you fail. This thing is the real indicator that determines whether you can survive in the market and continue making money.

**What exactly is the risk-reward ratio**

Let's take a concrete example. Suppose you use 1 million in capital to make 10 trades: 4 successful trades, earning 150,000, 250,000, 350,000, and 450,000 respectively; 6 unsuccessful trades, each losing an average of 111,700.

Calculating the numbers: total profit is 1.2 million, averaging 300,000 per winning trade; total loss is 670,000, averaging 111,700 per losing trade. So, the risk-reward ratio is 300,000 ÷ 111,700 ≈ 2.69.

What does this mean? Even if your win rate is only 40%, as long as you maintain a risk-reward ratio of around 2.7 in the long run, your account can still grow steadily. On the other hand, those with a 70% win rate but continuous losses are failing because their risk-reward ratio is completely reversed.

**Most people get this backwards**

In actual trading, a common magical move is: when losing, stubbornly hold on and refuse to cut losses; when winning, become impatient and hurriedly take profits. The final result is—average losses far exceed average gains. No matter how high your win rate is, it won't save you.

**My own execution rule**

I set a strict rule for myself: before any trade, I must calculate the preset risk-reward ratio. If it's less than 2:1, I won't open the position.

How do I do this specifically? For example, I see ZEC facing resistance in the 510-530 range, planning to build a position around 520—then I will set my target price and stop-loss in advance, ensuring that when I profit, I earn twice the amount I risk. Only then is it worth taking the risk.