The siren song of EM FX and the dangers of ignoring your system

I've been in and out of EM for decades, and one lesson I keep re-learning, sometimes the hard way, is the absolute necessity of sticking to your sizing rules, especially when things get choppy. A few years back, I got caught in an LCC (local currency bond) trade in a South American country. The thesis was solid, good carry, improving macro, but my sizing was a bit ambitious. When the political winds shifted abruptly, as they often do in EM, the currency ($BRL at the time) took a dive, and the bond market froze. My usual risk parameters would have had me out earlier, or at least in a much smaller position. Instead, I held on, rationalizing that the fundamentals would eventually reassert themselves. They did, eventually, but not before I rode out a drawdown that ate into a significant chunk of my gains from other trades that year. The mistake wasn't the initial trade idea, it was letting ego and a bit of FOMO over potential future gains override my established risk management protocols. It's a classic trap in EM where the potential rewards can often blind you to the outsized risks.