The bottom line is we must always maintain extreme discipline to adhere to stop prices when executing our trading system, or else the dollar amount of the average losing trades will be larger than the winning trades. (morpheustrading.com)
However, the reality is that a trader's long - term profitability depends largely on other factors, such as the dollar amount of the average winning trade compared to the dollar amount of the average losing trade. (morpheustrading.com)
Conversely, if a trader has a win rate of just 50 %, but allows the average winning trades to ride to being just double (200 %) the size of an average losing trade, the trader will become net profitable over the long - term. (morpheustrading.com)