Something is traumatic if it's very upsetting, painful, or disturbing. The word is related to a Greek word meaning "wound," so you can think of traumatic as something involving a wound, either physical or mental.
Your brother's reckless driving could make getting to school a traumatic experience in terms of your mental health. Traumatic can also describe a major physical injury, such as a traumatic brain injury. Post-traumatic stress disorder is a medical term used to describe the lasting and debilitating effects of something awful you've experienced, such as witnessing a disaster or suffering a major injury during combat.