Every trade risks a certain amount to try to make a certain amount. Compare the two and you get the risk-reward ratio. If you risk 10 dollars to make 30, that is a 1 to 3: you stand to gain three times what you put at risk.
This ratio is why you do not need to be right most of the time. At 1 to 3, you can lose more trades than you win and still grow. Win only 4 out of 10 and you make 120 on the winners while losing 60 on the losers. You are ahead, even being wrong 60% of the time.
The lesson is to hunt for trades where the reward clearly beats the risk, and to skip the ones where it does not. A setup where you risk 30 to make 10 needs you to be right almost every time, and nobody is.
A good risk-reward ratio lets you be wrong often and still profit. Aim for at least 1 to 2, and pass on trades where the reward is smaller than the risk.
Tip. Measure the ratio before you enter, using your planned stop and your planned target. If it does not look worth it on paper, it will not magically improve once you are in.