well, i think that no matter what sort of automated system you have, there has to be some manual intervention at certain times (i.e. 2008 storm, eur credit, japanese disaster, etc.) Yes, I am a real trader, and yes, i did work on the bank trading floor a while back... I usually don't calculate the risk tolerance in terms of 'pips' but usually on percentage, and tolerance of that specific trading accnt. if you have 1 %-3% exposure and you're in a 30% drawdown, then absolutely something is wrong with your strategy and where you are at in the account. i think the 'hope and pray' attitude or 'it HAS to come back ' attitude will truly get you in trouble. you have to know when to take a loss and stick to your trading discipline or you're totally screwed.
one bird in the hand is worth two in the bush