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The correct rate, or how much time is making money. For example, if you make 10 trades and 6 make money, then your correct rate is 60%.
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The ratio of profit and loss, that is, the relative size of profit and loss. When you trade at the same level, for example, one EURUSD, if you fail to trade, you lose 20 points and lose $200; but if you make a profit of 100 points in a successful trade and make a profit of $1,000, the profit-loss ratio is 5: 1.
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The frequency of trading opportunities. If the first two factors are fixed, then the final result depends on how often you trade. Doing 100 deals a day and doing 100 deals a year, the final result is completely different. Of course, under different time frames, the correct rate and profit ratio will have completely different distributions, and you need to make your own choices.
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Position adjustment model, which is how many units you trade each time. Obviously, multiplying your profit and loss points by your lot is your total profit and loss.
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The size of the principal. The final result of the transaction depends on the first four factors, but all of this is based on the principal. Most importantly, a large principal size gives you a strong risk resistance.
In trading, many investors often focus on one of the factors, namely the correct rate, but the five factors affect the outcome. Focusing on the right things is the beginning of a successful investment.