Jack Hershey makes a comment about Tolerance (which is a term used in explaining Addiction). So that gets me thinking about how most traders blow up and here is how I think it happens:

Addiction

You put on trades for the excitement of action because you lack the patience to wait for the lowest risk entries and lack the patience to hold for very large gains.

Tolerance

Thru addiction to action, you build up tolerance (insensitivity) to the action so you require more of it.
You find more action from overtrading so that's what you do.
Overtrading leads to losses: mostly small, sometimes big, sometimes Enormous Losses.
After taking an Enormous Loss, a big loss isn't so big anymore so your tolerance to big losses goes up.
So now you risk even more since you have to in order to recover from Enormous Losses (a 50% DD requires 100% return just to get even).
By now you've built up so much tolerance to market action and losses that you've become completely numb to market action and losses.

Blowup

You lose it all.
Which is actually the best thing that could possibly happen considering how bad the Addiction and Tolerance to Market Action and Losses had become.
All addicts eventually blow up from their addiction once tolerance gets built up so high that they become numb to the point of not even feeling any pain anymore.

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