In the case of consecutive wins. Why do I blow up my account even after winning consecutively? Because consecutive victories can lead one into a dangerous psychological state—loss aversion. They feel an overwhelming confidence after winning every battle, and when faced with unrealized losses, they often cannot accept the reality of 'I might lose.' At this time, to avoid losses, they may choose to drag their stop loss, hold onto their positions, or even take risks by heavily increasing their investment in a new trade when losses worsen, commonly known as 'Martingale betting.' At this point, they have already committed two major trading taboos: heavy positions and holding onto losing trades, which results in blowing up their account. The root cause of all this is excessive confidence and blind optimism brought about by consecutive wins.
Another scenario of blowing up an account occurs during consecutive losses. At this time, traders are easily dominated by another psychological mechanism—amplification of risk exposure. This is especially evident in gambling, where people become increasingly reckless during a losing streak, commonly known as becoming desperate and starting to bet recklessly, hoping to recover their losses. The same goes for trading; since I've already lost so much, I’ll take a heavy position and gamble a bit. Where there are children crying every day, there are gamblers losing every day. Thus, they begin to ignore their trading strategy, and the result is that one misstep leads to total disaster. In trading, this mindset manifests as abandoning the trading strategy, neglecting position management, and attempting to recover losses through heavy betting.
In fact, if you strictly follow the trading strategy and set reasonable position management, even if you lose more than ten trades in a row, the account will not go to zero. But in reality, many people, after losing three or four trades in a row, become emotionally unbalanced and blow up their account on the fifth trade.
Trading is against human nature. Loss aversion and risk exposure are deep-rooted weaknesses in human nature, which are infinitely amplified in trading. A successful trader must have a certain quality—calmness. Calmness means being able to indifferently watch the candlestick touch the stop loss point when in loss, rather than constantly adjusting the stop loss with price fluctuations; calmness means being able to stop and reflect on whether their mindset is unbalanced after consecutive losses, rather than hastily increasing their position or blindly entering the market at a bad time. The rule for surviving in this market is to calmly and mechanically adhere to your trading strategy and continuously improve it. Do you have no skills? Feeling confused? Can't find a way out??👇👇👇 Why not follow me, just to gain followers. Just comment to see.
