There's hundreds of ways to skin the proverbial cat, but in my experience it is having a variable stop loss on any trade which is a recipe for disaste. A fixed stop is by all means a viable way to trade; the way I think about it, every trade I enter (at full position) I am attempting to pick a relative top or bottom, no matter what signal or pattern I am looking at -- why should the degree to which I can be wrong change with each trade? If the market moves so far away from the critical "failure" point that I have to set a stop wider than my normal limit, I consider it a missed trade and wait for next setup. A fixed stop is really the only way to limit those extreme drawdowns, otherwise one can always find justifications in staying in a losing trade ("if it looked like a buy at 1240, it surely makes no sense to sell at 1230, no?" etc).
I try to be as ironclad as possible on the losers while being extremely lax about taking profits (to the point where some days I raise my stop to even and turn off the computer and just let my luck run -- wish I did that today
). I used to have very wild equity swings (30% + or - days occurred perhaps once every 2 weeks or so) until I finally clamped down on the losses. Of course this means you cap the upside extremes as well, but its definitely worth the sacrifice.