A trader's biggest danger isn't one bad trade but the slow decay of discipline after winning for too long. Success makes you sloppy: you skip stop-losses, ignore risk rules, and bet bigger as cash runs dry. When the market finally moves against you, years of gains vanish in days.
People don't blow up because they are wrong just once. They blow up because they relax the rules after being right too long. And the danger isn't the first trade, it's the 10th one that worked. It's the streak that convinces someone that this time is different. Stops don't matter, liquidity disappears, and because reserves were already consumed chasing those extra returns, there's no room for maneuver. There's no ability to hedge, which is so important. And of course, there's no ability to even stay in the trade, and accounts that took years to build get erased in a single move. And that's worse than the loss itself, because once you're forced out because the drawdown is too deep or the account is too far gone, compounding stops.
