Yes, this is risk management.
Without proper risk management, your trading strategy based on levels, indicators, patterns, etc.will not make any sense.
Any trading strategy should be supported by strict risk management, where the maximum allowable losses per transaction and the risk ratio are observed:the profit is always more than 1/2.
You don’t have to be right in every trade. It’s just that your profit in successful transactions should be greater than the losses in unprofitable transactions. This correct use of risk management will lead you to success.
The example shows one of the real scenarios of any trading system where the rules of risk management are observed:
Deposit of 10,000$
The risk per transaction is -1% (or -100$)
4 profitable trades = +14%
10 losing trades = -10%
Total: +4% (or + 400$)
Even though only 30% of the total number of profitable transactions, we still have a profitable result.
Learn risk management and become a consistently profitable trader.