Win rate and reward-to-risk combine into expectancy; position sizing turns expectancy into survivable risk.
Expectancy is the average result per trade: (win% × avg win) − (loss% × avg loss). It folds the two numbers from lesson one into a single answer — positive expectancy is an edge, negative is a leak, no matter how good the win rate looks alone.
Even a positive-expectancy setup ruins you if a single trade is too large. Position sizing ties the trade to a fixed fraction of risk: decide the dollar risk per trade (say 1% of the account), then size = risk ÷ distance to your stop. The setup gives the stop; sizing gives survival.
A string of losses is guaranteed eventually. Sizing so that a losing streak can’t end you is what keeps you in the game long enough for expectancy to play out. Edges only compound if you’re still there.