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How an Account Blew Up

The account starts with a defined strategy, positive expectancy, and 1% risk per trade. Then a normal losing sequence begins. Instead of keeping the original risk framework, the trader increases size to recover faster. Risk rises to 2–3%. Additional losses create more pressure, execution becomes less consistent, and risk is increased again. The failure mechanism is therefore not simply that the strategy stopped working. losses → urgency to recover → larger position size → larger drawdown → weaker execution → still more risk Once risk reaches 3–5% or more per trade, a short adverse sequence can produce a drawdown that is difficult to recover from. The case illustrates why risk rules are most valuable precisely when the trader feels the strongest temptation to override them.