This is a video from the research team over at TastyTrade. They do some long term back testing to show the results of an options strategy based on different levels of capital allocation. They show how a strategy can be both successful and unsuccessful based on the total risk used for the strategy.
Just an FYI, TT revolves around options trading but the principle behind their study doesn’t change. This video backs up an idea I have been saying for a long time which is that it is possible to have a winning strategy but through over-risking it can become a losing strategy. Don’t focus on the specific numbers in the video since those are based on selling naked put options, which have their own risk profiles, but take away the overall principle that there is a sweet spot for various trading methods and over-risking can turn it into a loser. I personally wonder how many new traders throw away a strategy because they are losing money, when perhaps the strategy is good but too much risk is being applied.