One-sentence conclusion:

Long-term stable profits depend on the risk-reward ratio, while short-term survival depends on the win rate; both must be used together, but the weight of the risk-reward ratio is far greater than that of the win rate.

 

1. First, look at the most core formula

As long as you trade, you can't get around this:

Expected return = Win rate × Average profit - Loss rate × Average loss

- High win rate: for example, 60% win and 40% lose, with a 1:1 risk-reward ratio
→ Profitable in the long run, but with extremely low tolerance—one big loss can wipe you out
- Low win rate: for example, 40% win and 60% lose, with a 2:1 risk-reward ratio
→ Still steadily profitable, and more resistant to drawdowns
- Very low win rate: 30% win, with a 3:1 risk-reward ratio
→ The returns are the same, but the drawdown is smaller—this is a feature of top-tier systems

Conclusion: The risk-reward ratio can make up for a low win rate, but a high win rate cannot make up for an extremely poor risk-reward ratio.

 

2. Which is more important?

Ranked by importance:

1. Risk-reward ratio > Win rate
2. Next are frequency, position size, and execution ability

- Only pursuing a high win rate:
It’s easy to turn into “make small profits, lose big,” and after several consecutive big losses you can get liquidated.
- Only pursuing a high risk-reward ratio:
A slightly lower win rate doesn’t matter. As long as you don’t frequently suffer big losses, you will definitely have positive returns in the long run.

 

3. The golden combination in real trading

The range that feels comfortable and can be executed long-term:

- Win rate: 40%～60%
- Risk-reward ratio: ≥2:1

As long as you meet this, you basically have a positive expected value system.

 

4. Extreme comparisons that are easy to understand at a glance

- Win rate 99%, risk-reward ratio 1:100
→ One losing trade eats up all profits
- Win rate 40%, risk-reward ratio 2:1
→ Steady profits

So:
Win rate determines whether you feel good or not, while the risk-reward ratio determines whether you can survive and make it to the end.
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