Guard your money, and develop your edge based on low risk ideas. Then add to positions when they show profits, not losses. At all times be ready to get out. The freedom to exit at any time is the speculator's main advantage, especially now that commissions are zero. Because the downside is the only thing you can really control.... We all know it takes 33% gain to make up for a 25% loss, or 100 for 50, and so on. Therefore guard your money at all times! For those who know trading is ultimately psychological.
Risk management is an important aspect of the business. But may not be the final answer. Just as one need to maintain the cleanliness and hygiene in a food business. To me, the entry is most important. If one’s entry is wrong - he will lose money. And if that is done frequently, an excellent risk management will only ensure a slow death.
The edge is the answer, not the risk management. If you have no edge, risk management can never make money for you. No, he didn't and he even does not realize it. Just like you. Can you explain me how risk management can help you, if you have no edge? How will risk management make you money to recover earlier losses? The only thing risk management can do is say:"Don't trade at all. You have no edge." Risk management can never generate money, only manage it.
Indeed, you need an edge. And the most important thing in that edge is a good entry. And the better the edge, the less important the risk management.
edge for entries + risk/trade mgmt for exits = solid trading plan where we fck up is not having a plan, or not being disciplined enough to follow it : o
If this were an exam question then having a discernable edge is the answer and adding with solid risk management is the answer for full marks.