For a discretionary trader trading smaller after a large win makes sense. The large win can distort your judgment and lead to taking foolish risks. Not sure how it works for a purely system guy. I personally don't change a thing whether it is a big up or down day. I'm not a huge fan of the 1% rule. But I'm pretty confident in what I am doing. Everyone needs to make there own rules. There is no one size fits all rule.
After a fairly large drawdown I don't think it makes sense to keep trading the same size. I think it is appropriate to trade smaller. When the market clearly and tangibly demonstrates to you that you are out of sync with it, I don't think it pays to ignore such information. Trading the same size because you don't want to "miss out" on the next "big move" is just one variation of overtrading and/or chasing the market when you're out of step. Better to get your footing back first. Just my opinion, of course.
I traded 8 ES minis yesterday morning and was COMPLETELY wrong -- first time in a long time I was 100% off in my analysis. Took a decent loss, hit my stop, and was done for the day. Didn't even do a trend-following buy in the afternoon to avail myself of the PM buying spree, waiting for the reversal to come, which it never did.....last evening, upon reflection, I realized that I was *totally* wrong -- and violated one of the tenets of the market: "the trend is your friend." (Yah, I feel like an idiot for missing the run yesterday, but there it is. Today is a different day.) I lost yesterday because of my incorrect plan, not because of a rash and impulsive decision....which is kind of reassuring, at least. :| I'd be angrier at myself if I lost money being impulsive and stupid. After all, even the best trading plans have bad days, right? So this morning I traded 4 ES minis and hit my intended profit points. Moreso just to get my confidence back, and also reinforce myself that caution is the better part of valor -- capital preservation is always good. Tomorrow I'll be back to 6, or possibly 8, depending on how things look. My .02, anyway.