I've lost 15-25k in a day multiple times (on accounts of 100-200k), trading CL and NG in 20-30 lots or trading weekly aapl options. being able to stomach and just take the loss, is the easy part, waking up the next morning and trying to find the motivation to get into the market again to make it back is the hardest part
Sell gamma/vega. Generally be short optionality. In this case, I sold downside puts on a light hedge into the pdufa date because I was getting just under 50/50 odds that the fda would approve the drug. I was expecting either approval or conditional approval. The real risk I was selling was the FDA requiring another trial. That would delay the approval by several years. As long as that didn't happen I would at least break even or make money. The FDA required another trial and the stock fell 75%. We had given this a 1% chance of happening given the nature of the original trials, the disease, and the panel's recommendation.
Option trading is like that, you're can chose a slow bleed or a bullet to the head. Daily losses are hard to remember, though rememer having some pretty serious gyrations in both the fall of '08 and August '11. Like one day I'd be up 5-10 and next day will give 5-7 back - all worked out well at the end but i did have some sleepless nights.
March 9, 09. I was short es. For the first 15 minutes of the opening bell I was up 750 bucks. I took the profits. When the price started to reverse I shorted again, and again at the pivot point. I didn't even turn on the news to hear what was going on. I figured I double down when the price went to 2nd resistance level. And again at the 3rd. After the whole day I was down about 14G. The worst part was I kept calling my broker to raise my daily loss limit (3 times). He advised me not to but I thought I was smarter. Hey I was making solid profits close to a month without a loss on a trade. It was half my account. After that I tried trading but realized I couldn't pull the trigger when I needed to, so I left. Selling stuff on amazon and ebay now. But I have a few trade ideas that I think I will test (on a sim of course)
I lost over 70% of all the gains in 2008. Lost 35% and once again erased all the gains for the year in August 2011. Since then I employ a much more conservative approach with the obvious consequence of having much modest gains. Yesterday and today 8/21/2015 the market went down more than usual and lost 2%. Although I am still up 8% for the year, this evening I am a little upset at myself because I could have easily lost just 1% instead of 2%. They are small numbers yet it makes a difference in my account as I could cover one month expenses off that 1%. It will probably take me 4 months to make it back if I make it back. I am selling time spreads on the SP 500 emini future options. In other words I sell the front month and buy the back month with an almost neutral outlook. I was so stunned by a sudden 2% loss that by the end of the trading day I was not able to get back in the market and place another small trade like I normally would have done. Trading is really tough and I already know that I will never make the kind of money I thought I would. All I learned in the last 10 years of trading is to survive. Losing money is part of my job but somehow today extra loss affected me more than usual. Maybe I need a little break to get mentally and emotionally sound again in order to deal with the pressure from trading and life in general.