In the world of trading, we often see advertisements that highlight the huge potential profits from certain trades. Phrases like “make 2000% profit on a single trade” are used to attract new traders and entice them to enter the market. But the truth is that these numbers, while they may seem impressive, are often deceiving. The most important factor in sustainable trading, the ratio (risk to reward ratio), is often ignored.
1. Profit percentage of the deal: a hidden trick behind the numbers
When people promote a high win rate on a single trade, they usually ignore something very important: the risk associated with that trade. A high win rate may be due to a very far stop loss, giving the impression that the trade has high profit potential, when in reality, the ratio may be 1:1 or even lower. In other words, the risk may be equal to or higher than the expected return, but simply because the target and stop loss are far from the current price, the profit appears large.
For example, if you open a trade with the goal of making a 2000% profit, but you set your stop loss too far away, the risk you are taking may be too high for the potential return. This may sound good at first, but in reality, if you lose the trade, you may lose as much or more than you were hoping to make. This is where the real low ratio comes to the fore, as the trade turns out to be not in your best interest in the long run.
2. Ratio: The real measure of deal success
Unlike the profit ratio, the ratio is based on a clear comparison between the potential risks and the expected returns. If your ratio is 1:2, it means that you are willing to lose 1 unit of capital in order to get 2 units of profit. This ratio clearly shows that, even with a number of losing trades, you can make profits in the long run.
But in cases where high profit ratios are promoted, the ratio is often weak, because traders leave the target and stop too far away, making the profit ratio appear larger. If the ratio is 1:1 or lower, each losing trade can wipe out the profits of a winning trade, which makes achieving sustainable profitability very difficult.
3. The importance of ratios to achieve sustainable profits
The ratio does not only reflect the potential of a single trade, but it is a tool for measuring the effectiveness of your strategy over the long term. If you are targeting a ratio of 1:3 or 1:4, this means that even with a modest success rate in your trades, you can make reasonable profits in the long term. However, if you rely on an imaginary profit rate from trades with a weak ratio, you are actually putting your capital at risk every time you open a new trade.
So, it is always important to focus on improving your ratio rather than looking for a high profit percentage from a single trade. A strong ratio is what determines your ability to make sustainable profits.
4. Misleading traders by making big profits look easy
Many deal providers tend to promote deals that will generate huge profits by a huge percentage, but they neglect to provide the full context of how those profits are calculated or the extent of the risk associated with them. These ads present an unrealistic picture of trading and encourage traders to enter into trades without taking into account the importance of ratio and risk management.
Sometimes, brokers advertise profits of up to 2000% or more, while the real ratio of the trade may be 1:1 or even less. This means that any small mistake or unexpected movement in the market can lead to a huge loss, which weakens the profits made from previous trades.
5. How to avoid the high profit percentage scam?
To avoid falling into the “high win rate” trap, you should evaluate trades not only based on the expected win rate, but also on the **ratio**. Always ask yourself:
- What level of risk am I taking?
- What is the expected return compared to the risk?
- Can I afford the potential losses?
Don't be fooled by the profit percentage of a trade unless you are sure that its ratio reflects balanced and rational risk management.
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Conclusion
The profit percentage of a trade is often a trick to attract new traders, but it does not reflect the true picture of sustainable profitability. The point in trading is the ratio, not the profit percentage of a single trade. The ratio is what determines your ability to achieve sustainable profits in the long term, and gives you the ability to face losses without affecting your overall performance. Avoid being lured by promises of high profits, and focus on building a strategy based on the ratio and effective risk management.
