That's entirely understandable and I appreciate your honesty and self examination.
The beauty of the markets is that they are so diverse. Everyone has their own comfort zone and tastes, so can and should invest and/or trade accordingly.
For example, lots of people were uncomfortable with UEIs long run of ten winning months between Jan and October this year, presumably because it made them constantly feel nervous that a losing month was imminent.
The longer the successful streak went on, the more nervous the people holding those beliefs probably felt...
Those same people are now probably feeling better about investing since the inevitable DD event, because that's what makes them feel comfortable. I imagine they take comfort in the past history of UEI, believing that this will be repeated in future, something I also believe because I have been trading it so long.
Is it a good point to buy?
Who can tell, but if that's what makes an investor comfortable holding my Darwin then that's great. As you say, you have to know what you are comfortable with and invest as such.
Ok, so UEI took a 12%DD in a couple of days.
I accept that is not nice, even for me its owner and with how long I have been trading it, which incidentally is now three years. I have however tried to explain why I don't yet feel nervous in the long term, as this DD is within expectations.
As can be seen from my trading history, I used to trade many more strategies before whittling them down the what is now UEI. If however I isolate the UEI strategies over the past three years, the annual results on my personal account are:
2018 YTD: +41.44%
Pretty good results by any measure and achieved with max DD of 12%, which personally I am comfortable with to get the gains...
If we end the year and 12%DD is the lowest point, does it really matter if it happened over the course of a few days or several months?
When 2018 becomes the past, 12% DD is 12% DD. The difference is how we emotionally respond to it...
Would 12% DD have felt better if it were three consecutive months of -4%DD?
Or maybe two of -6%DD?
six months of -2%? 12 of 1%?!!
Be honest, would any of those felt nice? When put in context maybe a short sharp DD is better as its easier to move on from??
Whats that? Don't want any DD?
Don't trade or invest then!! its part and parcel of investing and emphasises the importance of diversification.
At the time of writing UEI has achieved 26.40% gain this year (less than my personal account). Some would not be impressed with this, but I would be over the moon if I am able to achieve more than 20% annual gain on a consistent basis.
Given my personal accounts performance over the past three years, comprising 317 live trades I absolutely believe this to be possible.
I initially set a target of 50% for 2018, which perhaps in some way may have meant I was less open to changing the risk settings?
Whilst I'm not trying to shift blame, I honestly believe the weekend politicking and chatter regarding Brexit has had a larger than usual effect on weekend gaps, which for this particular strategy has not been so kind.
As such, I have reduced the risk on the Sterling pair for now, which hopefully should alleviate concerns going forwards regarding these events. However, we will all have to expect reduced profitability...
For this DD of 12% (-10% on personal account) in November 2018, there were better positive outlier months over the past 3 years (figures from personal account):
November 2016: +12.66%
June 2017: +21.72%
Jan 2018: +15.47%
So, for one negative monthly outlier month of -10% in three years, I have had three positive outlier months which collectively total +49.85%....
Like I say, I have the benefit of a longer perspective on this strategy and whatever way I look at it I believe it is going to be fine. I cant guarantee it, but my research and personal experience tells me this is very likely.