Shitty risk management, wrong psychology, and all around bad trading. Leverage just makes it worse. It's like giving a 1000cc motorcycle to a noobie - is the bike to blame? No.
This is most likely one of few posts I have to disagree with you, although you specialize in Crude Oil and I mainly trade ES, but every system I have designed in past four years have been number one priority of not losing often and not caring as much to making profits. Matter of fact, I have worked hard with ES to do 25-55% of trades to be plus one tick because of averaging down based on weekly stats. LOL, I don't move stops at all in ES, I don't use them in any of the indexes, Crude Oil you have to as it runs fast. I have spent first 26 years designing methods based on making profits, those are now automated, but I like not losing often, much less stress. But as a scalper, trading an hour and done, could rack up 25 trades. Even the options system been working on for two years getting very close to what I can live. But my long term models normally lose 75-85% of the futures trades and still do ok. I think young traders don't have the knowledge of what it takes to reduce losses and control one's "hoggish" tendencies to go for homerun trades than take consistent smaller profits in ES. Crude oil is very much a Support/Resistance market, so bigger gains can be had but of course at a cost of more smaller losses cause much more slop in day session. There are always trade offs.
I think a good trader should hate taking losses, but realize at the same time that they are inevitable but also partionally avoidable by improving your trading. Why? Because hating losses will stimulate traders to try to improve their system. It is a motivation for building a better system. If you don’t care about losses and see it as part of the game, you will never improve your trading. The holy grail is making huge profits and never lose money. Although this is unachievable, the objective is trying to get as close as possible to this holy grail. After 20 years of trading I still analyze on a daily basis all my trades and try to improve them. The result was: Reduced lossess massively much bigger profits frequency of trading much less because better timing and understanding of every wave.
Has nothing to do with how good I am or whether or not I'm good at all. It has to do with whether or not the trader has a trading plan other than "looked like it was going to go up". Most don't. It's amazing how quickly results improve if one studies, tests, prepares.
the first thing I do everytime I start trading (and that means when I wake up, and that can be several times a day) is to close out any positon that is showing me 1% or 2% loss and add to anything that is showing me a 1% or 2% profit or greater. That's a lot of losses, day in day out, week after week, month after month. It's really just a form of Martingaling. I always believe the final winning trade that doesn't get stopped out and gets added to will pay for all the losing trades. Rough way to make a living, since most of the time the market just chops. If you want to bet on the chop, just do what most scalpers do and never take a loss. It works almost all the time, until you get on the wrong side of a big trend, and then you take one very big loss or get wiped out.
when I started out, they called my strategy "Death by a Thousand Cuts." That's when I learned, "Never take a profit." I was very good at taking losses, the problem was I was also very good at taking profits. When I became a really lousy profit taker, it started adding up. A better title for a thread would be "The Horrors of Profits"
Dealing with losses ought to be simple, but it can get complicated. On the one hand, and all else being equal, you want a trading method that minimizes losses. And there's always room for improvement. On the other hand, re-examining your trading approach after every loss is a deep, dark rabbit hole you can get stuck in for a very long time. So where to draw the line between the inevitability of losses and the efficacy of your trading model? Ah, there's the rub. That's where judgment and experience will be your guide. The only thing I think is a given is that, relatively speaking, you should keep your losses looking more like bonsais rather than redwoods.
you can take a lot of small losses regularly, or one large loss rarely. Same thing only the one large loss saves you quite bit on spread and commissions, and allows you much larger margin for error if your entry was not quite right. The problem is with profits. You always know how much loss you can endure, but you never know how much profit the market will give you. If your rules for taking a profit are as simple as your rule for taking a loss I fear math and the costs will eat you alive. But I agree, no matter how you trade or what you trade, it always comes down to small losses and large winners. You can tweak that system anyway you want depending on what your market is doing at the time. It may involve adding to winners or losers, or going in whole hog all at once, but the rule is always the same, "Keep your losses small and let your profits ride."