Discipline in Trading: Differentiating Between Survival and Major Losses

Seeing this red chart is very painful. There’s a trader I know well—initially, a loss of 40,000 only a few thousand away from breakeven. But over more than a month, the loss grew to 80,000. In the morning, the loss was around 74,000, but by evening, it had expanded to 86,000. These red figures reflect one thing that retail traders often experience: the inability to maintain discipline under market pressure. This story is not an exception—it’s a recurring pattern in the market.

Psychology of Losses: Why Traders Lose Control

I’ve spoken with many traders still experiencing significant losses. Based on my experience, I know exactly what each trader’s weakness is when they trade. Most of their shortcomings are not technical but psychological: they lack calmness and consistent discipline.

When losses start piling up, traders often do things that make the situation worse:

First, they open positions without thorough analysis. Ignoring support and resistance levels, dismissing clear market signals. They just want to recover their capital quickly, leading to emotional rather than rational decisions.

Second, they avoid stop-losses for various reasons. When a position should be closed at a small loss, they instead hold on. As a result, losses continue to grow. In the case I observed: a trader could hold small positions well, but when opening large positions, they couldn’t withstand price fluctuations. They refuse to set stop-losses, keep adding margin, and eventually get margin called at the lowest point. The next day, the price even rises higher—this is the worst regret.

Position Management and Stop Loss: The Foundation of Discipline

The main problem I’ve identified is traders tend to add positions without control. Falling 5 to 10 points, they immediately add more. The issue isn’t adding positions itself, but adding without a stop-loss—this is a fatal mistake. When the mind is disturbed by previous losses, their mental state begins to break down, leading into a vicious cycle where losses keep increasing.

I once gave strict discipline to this trader: don’t add positions unless there’s a clear 50 to 80 points to take. If adding, it must include an uncompromising stop-loss. But this advice only went in one ear and out the other. After suffering big losses, they couldn’t control their hands anymore.

To give a specific example: the profit target should be 50 to 80 points per session, but this trader often only takes 10 to 15 points, while risking much more. This is a very unfavorable trade-off. When market fluctuations slightly oppose their position, losses happen quickly.

Recovery Strategy: From Small Losses to Sustainable Growth

There’s an important principle often overlooked: when making money in the market quickly, it’s easy to lose oneself. Never forget that losing money can happen very fast too.

As the new year approaches, my focus is on small, consistent positions. Why? Because small losses won’t affect your mood and mental state. Small losses are easy to recover in subsequent trades. Conversely, when losses are large, it becomes very difficult to handle the psychological pressure. That’s why stop-losses are the foundation of a disciplined trader’s mindset.

The recent one-way market movements have taught many lessons to traders still clinging to their positions. Only by holding onto positions can retail traders actually suffer the most in such market conditions. Ironically, I, as a “gambler,” survive because I use stop-losses—discipline makes all the difference.

BTC and ETH still show high volatility:

• BTC USDT Perpetual: Reached 68,763.6 with a movement of +5.14%
• ETH USDT Perpetual: Reached 2,047.32 with a movement of +6.88%

These movements remind us that disciplined risk management is the real key to surviving and growing in a dynamic market. Without discipline, even a profitable market can wipe out your capital.