True re your figures of 23% etc. But what you're not (I think) taking into account is the mental capital, or the psychology of trading.
Keeping your risk small means smaller profits of course but EASY TRADING, ie you put the trade on and if it loses you lose 1%, no big deal. So you put the next trade on and it loses so now you're down 2%, no big deal. This goes on for 5 losses in a row and so you're 5% down, again not that much of a problem given you're expected to make an overall profit over the year.
Now let's do it with 3%, well you know it's 15% loss. Easy to talke about but when it's real money you're trading is now a lot different, it's HARD, maybe you're getting a little bit scared etc, maybe you don't take the next trade because it's looks like a sure loser (or course it won't be if you don't take it).
But you might say, that it's never had 5 losers in a row? Sure, but the data sample is getting bigger which means the runs (plus and minus) will also get bigger so a 5 loss run is going to come, just a matter of time.
Summary: With 1% you won't make as much but you'll be able to take every trade and remain upbeat whatever happens. With 3%+ per trade you could become a nervous wreck and so you defeat yourself rather than the market or strategy.
Not sayint you don't have thick blood but many people think that until they find out their blood was very thin, losses can do that to people......
