Today I suffered a loss on a particular trade greater than my initial risk. This is the second trade in which I suffered such a loss since last July, and covers a sample of almost 150 trades (in both cases, the loss equated to just over -1.6R) As it turned out, I was stopped out on the open, which was the low of the day. Such is life. However, this, combined with a erosion of open profits in other positions, meant in total I was stopped out of four positions today and a big chunk of my open profits disappeared.
One of these other trades actually triggered my stop at its low for the day, before rallying and finishing up over 3%!
While overriding your signals may benefit you once in a while, I have found (along with plenty of other systematic traders) that by sticking to the rules over the long haul, you will end up more profitable than had you intervened. There is always the danger of the one time you allow a trade in a loss position to run, that small loss could end up being a much greater loss.
Psychologically today has had no effect on me - I can only control the factors I control e.g. entries, stop placement, risk per trade etc. Where the market goes after I open a position I have no control over. What will be, will be. Sometimes I will make a profit, other times a loss. Normally my losses are much smaller than my profits, but when a stock gaps through your intended stop level there is nothing you can do, but bite the bullet, take your loss, and move on.
The irony of today is that, despite all this, my cash equity showed little change, as some of my stops were triggered in profitable trades that suffered a pullback where the trend is now bending. As a result of this, based on how I calculate my risk per trade parameters, my position size in monetary terms on any new trades will remain at a similar level.