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Successful traders often tighten their rules as confidence grows, cutting position sizes and safety margins that once protected them. Markets punish this comfort harder than ignorance. One bad event can wipe out years of gains.
Successful traders often tighten their rules as confidence grows, cutting position sizes and safety margins that once protected them. Markets punish this comfort harder than ignorance. One bad event can wipe out years of gains.
Most traders reach if they stay in the game long enough. They've been disciplined, they've followed their rules, they've sized conservatively, and it's worked. The trades close green, drawdowns are manageable, and they're using a system that behaves exactly the way it's supposed to. Over time, confidence though, it turns into comfort, and that's when the thinking starts to shift. They start adjusting, but just a little, and then you start to see positions start to get a little larger, safety margins get a little tighter, and reserves inside the account get reduced because they just start to feel inefficient. And from the outside, nothing looks reckless. In fact, it just kind of looks like optimization. And this is kind of the same mistake that people make with insurance. You see, when nothing bad has happened for a long time, insurance kind of starts to feel unnecessary and they optimize it away. And of course, everything looks fine right up until the day that something goes wrong. But that inefficiency is the trade-off you make to avoid a loss. And this is where people get absolutely destroyed because the market doesn't punish ignorance nearly as hard as it punishes comfort.
