I've never had a life changing loss, though early on I let some bonds go against me 5 handles. A large loss that leads to a lifestyle change is something that psychologically can be overcome with enough time and persistance.
Everyone is f*cked, no one wants to buy, everyone who is short f*cking congratulations. I now play this before each trading day. <object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/Mk3hmifWLhE&hl=en&fs=1"></param><param name="allowFullScreen" value="true"></param><embed src="http://www.youtube.com/v/Mk3hmifWLhE&hl=en&fs=1" type="application/x-shockwave-flash" allowfullscreen="true" width="425" height="344"></embed></object>
personally I unconsciously go on a wreckless revenge trade which drains even more $$$$ out of my pocket. this has never worked out for me. but i'll try until it does. <-- (still in a revenge mode)......I hope this explains why i've been sucking the past 2 months.
that is how I am. my pairs are all over the place and you know you need to hold them longer but stomach the swings. today. I was 10% swing from being down then 10% up and then finishing almost flat. If it is a directional lost, I feel a lump in my throat. I will usually pace around (hope it isnt bad enough to the point of worrying my monthly bills) and I will eat a hand ful of Tums
The question should really be how stupid do you have to be in order to put yourself in the situation where you are forced to take a big loss. Success in trading equals finding the balance between risk and caution. I cannot emphasize the stupidity of letting your account drop double digits off of one trade. No matter how much money you have you will always be a couple trades away from ruin. That is insane! Go base jumping if you really need to live life on the edge.
About drawdowns.... After taking a big one to the chin, exercise...punch bag...etc... Advice: Does anyone keep a "pure speculation" account just to do risky crap? I think that would prevent major mistakes by using a small-"gamble" account and keeping your main account conservative based on system. I would think a well capitalized trader could "play" with 10k or so.
imho, composure after a big win is maybe as important as composure after a windfall. at least it is for me. even keeled is my goal.
Those are the toughies. I'm disciplined within my limits but several times I've been in those situations and it's never pretty. Once in the Bond pit the market went bid on the first headline following a Thirty Year auction and I bought 50 on the offer. It was a Goldman order and the broker came back and offered me 350 more on the bid which I foolishly took. I was buying something like 89.14's and when I looked to see what was bid a local-the late Charlie D'-was offering size at 88.30. I was out 200k and hadn't even written the trade on my card yet. The market broke another 10/32nds on air so I bought 200 more at 88.20. They drifted back to 88.29 on VERY light volume and as soon as I checked the rally by hitting a couple of 50 lot bids the whole place went sellers hard again down to new lows. Then to make the whole thing worse yet I said "fuck it, I'm taking them home" and sure enough the market opened up a full point lower the next morning. Total loss over 500k from a 50 lot initial trade that I normally would have only risked a couple of tics on....