The most dangerous position is often the one that has been making money for you all along.

Short-term trader Linda Raschke, known as the “market witch,” built her career early on selling straddle options.
Back then, she almost always did this kind of trade: as long as the stock price didn’t move too sharply up or down, the options’ time value kept decaying, and she could continue collecting the premium.
When Cities Service was trading at about $34 per share, she sold a straddle with a strike price of $40, collecting a $10 premium; with only two days left until expiration, the trade would profit as long as the share price stayed between $30 and $50.
Before the close, she even added another batch of positions, thinking, “How could I possibly lose?”
As it turned out, the next day Cities Service was halted; Gulf Oil then suddenly proposed acquiring it for $63 per share. After trading resumed, the stock jumped by about $20.
Her account couldn’t maintain the position—within a day, she lost $86k; both the principal and profits were wiped out, and she ended up owing $30k.
Getting into the trading business by selling straddle options also nearly got her driven out by the same kind of trade.
Later, Linda found that her biggest losses often came from positions that were small and became too familiar—those positions were easiest to overlook, which made people let their guard down.
After that, she placed more emphasis on handling mistakes: detect them quickly, correct them immediately. Once a trade becomes invalid, exit right away—there’s no need to hedge and drag the position into greater complexity.
Later on, she mainly ran short-term trades holding for two or three days. She judged direction only, didn’t predict the magnitude. If the market didn’t cooperate, she would leave the trade.