I went through a similar problem, Fallenangel. At the time I had been learning to trade the SPI and had been at it for a couple of years. Was pretty much break-even stuff. Then we went into business for a couple of years, and I paper traded on the side just to keep my hand in and keep up with the learning process. Was doing great with paper trading and then when we decided to sell the business, the plan was for me to go live again.
With no other income, I found exactly as you have described! Suddenly with capital to protect and yet needing to generate income from trading, I would literally freeze at the trigger.
In hindsight, it was totally unrealistic to try and replace our full income without any prior live results or live experience.
Hubby was bored with retirement anyway, so he went back to work and that took some of the pressure off. I also worked on risk and money management plans (thanks to posts by Tech/A and others at the time) which help to reduce the fear of a few losses in a row. I also found Nick Radge's book extremely helpful - especially the first 40 or so pages. It's packed away in storage at the moment - so can't remember the exact title - maybe someone else can post it.
I also had about six sessions with an excellent psychologist. She knew nothing about trading, but understood fear perfectly.
Although we didn't touch a lot on trading much, somehow those sessions taught me to tackle trading differently.
That said, I'm conservative in my trading at present and I guess that means I'm trading within a certain comfort level. There are other family factors that make it difficult to focus to the degree that I would like, but the goal is challenge that comfort level by degrees.
It's an unpleasant thing to go through and I wish you all the best working through it.