Comment: Your July 4 entry is instructive, but does not hold together. You mention risking $1000 on each trade, yet you have two examples of losses of $2,000 and $1,500. Per the "rules" of your example this could not happen, you would have been stopped out at $1000 loss.

My reply: Just because you have stops that should get you out at a particular levels doesn't mean that you will get out at that level. First, the market will definitely gap against you from time to time. A stop order is generally
designed to get you out at the market once the stop price is given. However, anyone who uses stops on a regular basis will soon learn that you will quite often have losses that are much bigger than your stop.

I usually estimate that such happenings should not be bigger than 2R -- although they could be. If you were in silver when the government changed the rules because the Hunt Brothers had cornered the markets, the markets basically were in a free fall to the downside with no way to get out. This can easily happen in the futures market with limit down days in which no orders get filled because there is such a demand to sell with no buying demand.

Lastly, psychological errors and mistakes will always creep into people's trading. I usually consider losses of 5R or greater to be psychological losses. Yes, the examples are accurate because you can easily have losses bigger than your stop.