As you rightly said recovering from loss is very difficult. The moment a trader loses a huge chunk of his capital, confidence is lost. From then on repeated mistakes are done. This is a cycle very difficult to break. That is the reason for stressing on using low leverage/exposure. A small loss will never demoralize you. A big loss will beat your morale down to earth. Capital management is a very important task for traders. A bit of overconfidence is all that is required to lose everything in forex market.