Variable initialization and loops - python-3.x

Question

I'm new to coding and was trying to make a hangman game. My code works but it does not add and remove letters from the sets above. Could somebody please explain what I'm doing wrong. Thank you in advance. The code is written below;
from random_word import RandomWords
import string
lives = 160
number_of_plays = 0
all_letters = set(string.ascii_lowercase)
print("Please type a letter to play or 1 to quit")
print('You only have 6 chances to guess the correct word')
correct_word = RandomWords()
generated_word = correct_word.get_random_word() # a random word
while number_of_plays < lives:
player_command = input('> ').lower() # player letter input
generated_word_letters = set(generated_word) # tabulates letters in the aforementioned word
guessed_letters = set() # input from the player
correct_guessed_word = (letter if letter in guessed_letters else '_' for letter in generated_word)
if player_command == '1':
print('Game over')
break
elif player_command in all_letters:
guessed_letters.add(player_command)
if player_command in generated_word_letters:
generated_word_letters.remove(player_command)
print('Current correct guessed word: ', ''.join(correct_guessed_word))
continue
elif player_command not in generated_word_letters:
number_of_plays += 1
print('You have lost one life')
print('You have used these letters: ', ''.join(guessed_letters))
print('Current correct guessed word: ', ''.join(correct_guessed_word))
continue
elif player_command not in all_letters:
number_of_plays += 1
print('You have lost one life')
print('Please type in a letter!')

Answer 1

You are on the right track. You just made the mistake of initializing your sets inside the loop. So, what is happening is that every time your loop starts again, you are wiping out what was in them before. Simply initialize your sets before jumping into the loop as shown below. Note: I just overrode your RandomWords with a fixed word for troubleshooting. Nice game!
#from random_word import RandomWords
import string
lives = 160
number_of_plays = 0
all_letters = set(string.ascii_lowercase)
print("Please type a letter to play or 1 to quit")
print('You only have 6 chances to guess the correct word')
#correct_word = RandomWords()
generated_word = "lunch" #correct_word.get_random_word() # a random word
generated_word_letters = set(generated_word) # tabulates letters in the aforementioned word
guessed_letters = set() # input from the player
while number_of_plays < lives:
player_command = input('> ').lower() # player letter input
correct_guessed_word = (letter if letter in guessed_letters else '_' for letter in generated_word)
if player_command == '1':
print('Game over')
break
elif player_command in all_letters:
guessed_letters.add(player_command)
if player_command in generated_word_letters:
generated_word_letters.remove(player_command)
print('Current correct guessed word: ', ''.join(correct_guessed_word))
continue
elif player_command not in generated_word_letters:
number_of_plays += 1
print('You have lost one life')
print('You have used these letters: ', ''.join(guessed_letters))
print('Current correct guessed word: ', ''.join(correct_guessed_word))
continue
elif player_command not in all_letters:
number_of_plays += 1
print('You have lost one life')
print('Please type in a letter!')