Why do contracts go bankrupt? Simply having a stop-loss sometimes only prevents breakeven losses or profit retracement losses. But why are there countless people going bankrupt in the contract market?

The real reason is related to human nature, and bankruptcies generally occur under two psychological states.

The first is during a winning streak; when a person is continuously winning, they develop a loss aversion mentality and cannot accept leaving with a loss. They will want to hold on or increase their position, adding more and more, and ultimately end up going bankrupt.

The other is during a losing streak; at this point, human nature triggers a fearlessness towards risk. Since they've already lost, they might as well go all in against the main force! The leverage amplifies the characteristics of a reckless mentality, and in the end, they go bankrupt.

All techniques are merely aids; even the best traders make mistakes at times. This is not the focus; the focus is on how you should handle it when you are wrong. Should you follow human nature's fear and greed, or strictly execute your strategy and stop-loss?

Leverage trading is inherently an amplifier of human nature. No matter how skilled a trader is, they will ultimately lose to their own nature. The traders who eventually find success do not conquer the market; they conquer their own human nature.

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