A good money management should be tailored to avoid big drawdown, so yes it is a solution. Obviously you still need to be profitable otherwise you end up loosing. There is nothing that will give you a 100% to win forever however. What are the chances? well it depends on many, many things. But I can give you an example and do the maths from that:
Let’s say you consider 30% of drawdown is your personal limit.
Let’s imagine that you have a mechanical system that magically gives you 60% chance of win over a hundred trades a year. Your SL and TP are both at 100 pips. So you basicaly win X$ 6 times over ten, and loose X$ 4 times over ten, this is profitable in theory.
To make it simple, let’s suppose your money management rules are to take only a trade at a time. You adjust your position sizing so that each trade is X% of your capital.
The probability of loosing N times in a row are (4/10)^N. What probability would you consider too risky?
If you take your risk parameter X at 10% of your capital, you will loose 30% of your money and probably become psycologically shocked after 3 loss. The probability of that 0.4^3 = 6.4/100 approx. You have 6.4% chances your next 3 trades will put you at your limit. The number alone seems small, but do not forget you make 100 trades per year!
Now if you risk 3% per trade instead of 10%. You need 10 losses in a row before reaching your limit. The probability becomes 0.4^10= 0.01/100. You are a lot safer. The bad news is that it also reduces you profits.
In other terms, from a given trading performance you can set your money management to either grow slowly and safely, or to grow fast and risk to loose the game ![:smiley: :smiley:](https://forums.babypips.com/images/emoji/twitter/smiley.png?v=5)
That is just by changing the amount of money you risk per trade. Your money management rules can be a lot more complicated if you split your exist, enter multiple trades at once on different pairs, use different systems, etc…
I’ll edit this post in 5 minutes, I may be able to add a graph for a more visual explanation.
edit: it will take me more than 5 minutes, but I have not forgotten. I will add a reply when I can.