Usually it comes down to too much leverage, a bit of bad luck and too many collrelated positions that cascade. One of my best clients lost 150mill one year but was very close to making that much as he was close to getting a couple of his targets hit (I think 1 or 2 pips in a Euro/kiwi for one) the positions he had turned around very quickly and left him fucked. As this guy was a star trader and had been for many years he was given certain risk dispensations that came back to bite the hedge fund in the arse.
I have seen over the years very good traders blow out. A breakup, divorce drugs drinking. One thing i keep in my is what i have seen through my years of trading and to stay humble and i keep this logic " i am as good as my last trade". I saw a trader get buried in BLUE and he just couldn't admit he was wrong. News can break a stock can halt and it is all part of the job. To answer your question some traders lose discipline or some just have bad luck.
. Right entry . proper position sizing . proper risk management . Proper diversity / Hedge planing . Market status awareness and looking at the market in all time frames, including awarness of support and resistance in biger time frames . discipline and high emotion control --- Failure on any of above items can hurt your trading.....
Many reasons: 1. the way a trader makes his money is also the way he loses it, for example a big gambler loses all on a big bet. 2. market conditions changes, e.g., bull turns bear. 3. lapse of discipline, this stuff erodes with time. 4. neurological disorder. 5. senile, too old to trade, 6. accidental=carelessness=bad luck.