Why is trading with high leverage doomed to fail?
Because when you make a certain amount of profit, a single trade can lead to significant losses, and this magnitude of loss can affect your mindset. Everyone's psychological tolerance is different, but once it hits your threshold, it will impact you.
You may become eager to prove yourself and open the next trade, often increasing the leverage and position size. However, in this state, the win rate is generally not high. This leads you closer to liquidation or massive losses.
So how should you respond?
1. Try not to exceed four times leverage;
2. If you can't control yourself, utilize a cooling-off period to reduce the frequency of trades in this state;
3. For the next trade, do not increase the position size; instead, you should lower the position size until you regain confidence and a positive mindset!
