Let's dive in n take a look Why risk management is so important ?
If you enter a $100 trade and lose 15%, you’re down to $85.
If you make 15% profit on your next trade, now you have $97.75
It's harder to recover losses than to preserve funds. Don't think how much you can make on a trade. Think of how much you can lose on a trade. Risk-Reward ratio is key.
Also win % does not make a successful trader, but strategy and risk management do.
For example:
One trader has a 60% win rate but his portfolio is down 6% using a 2/1 risk-reward.
Another trader has a 30% win rate but his portfolio is up 12% using a 1/5 risk-reward.
So, it’s necessary to have very strict rules on risk management that help you to always preserve the capital and not to take crazy risks.