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.
It makes lots of sense. Most traders never bother about how much they could risk on their every trade as they are usually focus on how much profits they may make. Simply if you are able to make more profits than your losses then you can escape!
In other words, cut your losses earlier. Or choose the trade which has (comparatively) low stop-loss levels and strictly follow the habit of exiting the trades at stop-loss.
Risk management is all about: Your rough estimation about your profits and loses before entering into actual trades.
You may have low winning rates but if you keep your losses at low then your winning trades may compensate your losses in other trades. It is possible only when you follow risk management. I guess only traders who bother about preventing losses may able to follow these kinds of management principles more consciously. But I am a trader who forgets all my own discipline rules and may think about my own set of rules only when my trade turns negative. This happened to me at least 25 times still I am unable to control myself when I get a signal for a new trade.