We're going to be talking about how I lost $350,000 and it was actually even more than that and what that felt like this coffee time.

Now this is a story that I've never shared until now, not because it's so deeply personal and painful, but really, because there's just never been any good opportunities at dinner time where I could just come up and say, Hey, guys, I lost $350,000.

You know, it's just not good dinner table conversation material.

One of the worst things about this loss, I would say, is that there's not much to learn from it.

It was through stocks Day trading, and it's not like a fire to build a business with a bunch of money in tow.

Have a bunch of learning is that business fails.

I lose a bunch of money, but still I come out of that with a bunch of good lessons.

Some things I could write on my resume, some nice stories.

I can tell the future employers.

No, this was essentially skilled this right?

I just went in there.

I thought I could make some money.

I didn't Don't really know why.

Read a bunch of news, tried to figure out what was going on.

I have a few theories here and there.

This was especially painful to me because I had spent actually, like, a year trying to get good at day trading.

I have learned all about technical analysis.

I have been reading up on news, staying up to date with the Economist region that every week, and yet I still manage to lose so much money that it just made me wonder, like, What am I even doing here?

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I could spend the whole month stressing out over stock's checking every single price move reading other news, making a ton of different trades.

Or I could spend the whole month on the long term buy and hold strategy, and there's no telling which method is going to really come out ahead.

So I kept this story short, but what happened was I have bought a bunch of commodities.

You could see my tax return.

I have awesome R J I R J a g p a d B c some precious metals like Goethe Silver, these air mostly stocks that represent underlying commodities and commodities are like agriculture, grain, rice, corn based raw materials, industrial metals, copper, things like that.

And the reason I have bought a lot of this stuff was because commodities have had the good run up in the first half of 2014 and also because I felt that the dollar was weak and I just thought it was good diversification.

And I thought commodities were relatively stable, perhaps because they represented Rio physical materials underneath.

But what happened was that in the later half of 2014 commodities dropped 40% and this was known as a commodity price shock of 2014.

If you look at that, people don't really know what happened.

According to Wikipedia, the commodity pressure cannot be attributed to any single factor or define the event.

It was caused by host of industry specific macro economic and financial factors which came together to cause this huge simultaneous large drop.

And so this by other news as reading the technical analysis that I was doing messing around with bowling drip pans, simple moving averages, Fibonacci lines.

None of that really worked.

And I just lost my shirt in that whole game and there would be days I would be losing 2030 $40,000 in the day.

And meanwhile, my job was paying me like, a few 100 bucks that day.

And I think it was that around that time that I had been quitting a lot of my jobs because I just didn't see the meaning of that.

And I really wanted to get more focused on day trading because I felt that that had more financial impact.

But for me, despite how much I tried, I don't know if any of my efforts and stocks really had any impact, right.

Some of it could have just been imaginary.

Maybe I was making money just because I was lucky sometimes.

But I think I can attribute my losses to a few factors and these may be good takeaways.

When is that?

I had been new to the game and I felt a little overconfident and I was starting to make money right off the bat and I thought that this whole thing could continue, but you can only be lucky for so long.

So during this time I would do a lot of leveraged investing where I would take out loans from the brokerage at the lower interest rate.

And then I would invest in the stock market, believing that I could beat the interest rate, at least, and for a while, this actually worked out okay.

To me, the reasoning was the number one.

I did not intend to buy a house right?

Most people, they'll go buy a house that's like 30 ex leverage.

And so I felt that if I was going to invest into the markets, I need to do also have some leverage so that I could keep pace with all the other people who may be buying homes.

And you can see that based on this chart, you know, after I have had a good run up, it just started dropping, and they would just drop every single day and go down in them, and I kept believing that maybe it would go up and there wasn't a steep drop.

It was just a gradual decline, the type that really catches you by surprise over a long period of time and you just keep thinking Well, maybe it's going to go up.

Maybe it's just gonna go up starting now, maybe next week.

It never really recovered.

After that, you can see that it just went down all the way.

40% drop and it just kind of hover down there.

You know, I think that one problem for me was that I had also thought I was pretty clever.

I started reading this site called Zero Hedge Witches, popular among traders.

But it's also very biased in the news, right.

They would have all this doom and gloom sort of news where they would say that you and the US dollar is gonna tank.

You have to buy commodities, you have to diversify your assets, go the and silver.

They're going to go up and actually believe some of this stuff.

Every now and then, you would find that some of the advice came in useful.

But the timing is everything in my head.

I was so confident because I was only reading the news that I wanted to read.

After this whole experience, I actually started putting more mainstream news like Yahoo finance onto the book much that I would check just because I wanted some more balance.

By the end of the year, I logged in and came to the hard conclusion to just cut my losses.

You know, I didn't believe in commodities or go there anymore.

At that point, I had seen that the SNP stocks were all going up, or at least neutral, and I felt that I had been jaded and brainwashed by the new sites that have been reading these days.

You also see the high frequency trading accounts for like 90% or more of daily stock trades.

You know you're not trading against normal people anymore.

You're trading against robots and without realized in my trading was that as soon as the news hit, like CNN from Page or a market watch front page, it's already old news.

By then, other trades have already been done by the robots, who are trading at milliseconds of news simply using machine learning algorithms.

No one's actually reading any of the news anymore, right?

We're just simply because normal people like you and me, we're trying to read the news.

We're trying to read that to try to understand what direction.

The stock's going to move, but machines aren't actually reading it.

And yet they're making 90% of the daily trades.

Also realize that as an individual I would be trading up against ho teams of people over at like, say, Goldman Sachs, who are all focused on, say, the oil industry, or all focused on tech or commodities or precious metals or whatever.

And they're sharing information and reports with each other.

And yet here I was a single person.

I have no team.

Nobody's telling me if there's a macro economic move or if there's some other news on the other side of the world that may be affecting my trading commodities.

It's just way too much news for a single person to keep up on.

So for me, one of my big takeaways from that experience where I lost a lot of money was it doesn't matter if you're right, you know, maybe you read a bunch of news.

Maybe you'll get a hot tip and yeah, maybe you're going to make some money there.

But what really matters is your system.

What is your system for limiting your losses?

Right?

Because even if you trade successfully 99% of the time that 1% of the time can wipe you out.

If you're highly leveraged in and you don't have proper stop losses in there, you don't have a way to limit your losses.

And just right the trend line all the way down like I did.

I wrote it down 40%.

You know, I'm not sure if there's a really great system, right?

Like for a while, I thought, OK, everything needs to have stop Loss is right as soon as the stock drops 2%.

I would just sell that and cut it off, but I would let their rise if it's at all possible.

Right trailing stop loss.

You know, it's really hard to time that trailing stop level among crackly because more often than not, your stop losses were just get hit and you just lock in losses everywhere you go.

What I did after that was I looked into using algorithmic trading, so I used this platform quant o p in dot com, which I'm not sponsored by, and there's a few other platforms like this where you can actually write python scripts to do trading for you And so I would try a few different algorithms.

You know, I would trade based on earnings reports, and if their earnings report beat the forecast, then I would have the algorithm automatically buy that stock, hold it for three days and then sell it.

I also stopped shorting stocks, which I used to do a lot of, but I realized that the natural movement of the stocks is to go upwards.

It's not like a stock has a 50 50 chance of going up or down.

It actually has a higher chance.

I was going up.

So using quantum peon, I was able to come up with an algorithm back test against historical dates, see how the algorithm would have performed.

And then I actually ran the algorithm and tried it out, and it made me like 2000 bucks here and there.

It wasn't much, though, and what happened is it would actually generate a bunch of fees and brokerages.

I eventually just stopped that and decided I'm going to go towards more asset at location, so I might say, I want 10% go.

The 20% bonds, 20% commodities, 20% tech stocks or something like that.

The analogy I like to think about is imagine if I were just like a sailor, right?

Without in the country, and I'm going around doing work.

And wherever I go, people pay me so I might go somewhere and someone just says they don't really have any U S dollars, but they have a bunch of corn, so they pay me corn or something else may come and say they only have Microsoft stock.

They pay me some Microsoft stock.

Some of those may have only Japanese yen.

Some people have oil.

Some people have only bonds.

So that's really the theory behind the asset allocation.

You know, it's just like, well, what type of currency would you like to accept and keep your assets held in?

So let's talk about what this felt like to me, and I often equated in my mind to losing a Lamborghini.

And, you know, maybe that's why I don't drive a Lamborghini, because in my mind, I've already lost one.

And other than that, it sent me back a number of years in terms of income, and I can imagine that if I was the type of person to be struggling really hard every single year in the job that I hate it, then it would totally not be worth it right.

I would feel pretty bad.

I would feel despair that I had just given up years of my life for this and struggled and there was painful and I thought I would get money.

But then I just lost it all in the blink of an eye.

Then I would have to redo all of that all over again.

But it's not really quite like that for me because I've been enjoying life as it came, and especially after this experience, it made me realize that money can be gained and money can be lost and to never really just focus only on that aspect, right?

If your pig ample job it should be, I think for, like, lifestyle, right?

Don't bet on being able to keep that money forever because you might just lose it.

You might lose it in the number of ways and to make sure that you're having a good time having fun as you're earning that because that's going to end up being your life as well.

It's not just simply a trade of your time, your effort for money.

You're giving away your lifestyle as well.

Which is kind of why I enjoy personally working in really nice Cos right, like nice offices does one of the top things I actually look for when I apply for jobs.

I look for just a good, clean, comfortable working environment, you know, personally, for me, I would not be working in office like a really crummy hot, stuffy started environment in which people treat me like garbage.

I would not do something like that because it's not worth it, even if there's money to be made because money can be lost as well and actually desert of experience with happen over and over for me.

You know, I'm not sure if I learned anything from it, because even after that, I continue to lose money in the stock market even today.

So these days I tend to stay away from playing too many games with the stock market and then spend my efforts on other, more interesting, more fulfilling things that you know I can actually build skills from learn from So that go for me.

Let me know what your investment strategies, if you like the video give the like and subscribe bounce you next time.