Hey hey, what's up my friend so in today's video i want to share with you a hundred thousand dollars loss that i've incurred and what you can learn from it. So here's the screenshot right the proof right off my loss right. This is on the live. Uh trading account, as you can see over here, all right.

It's live and uh. I funded this sub account with a hundred grand and right now it's left with about 4 500 right. So at a point where i did this screenshot, so you can see that the loss is pretty much here. If you want to see about about here's about 80 plus thousand, but uh there's a bit of more losses which is not shown in this screenshot over here.

So all in all, the total loss is about 95 grand almost a hundred thousand dollars, so i put it as hundred grand because it's easier to say, okay, so what i want to share with you next is kind of like the backstory. You know how how it happened. You know why it happened and the lessons that you can take away from it. So let me share with you the back story, so it was back in 2020 in april, where the price of oil collapsed right and the reason it collapsed collapses for two major reasons: number one.

There is a huge oversupply of oil and number two. The demand of oil right is very low due to covet 19 right. You know planes, they can't fly, there's no need for oil. So when you have a huge supply of oil met with a very low demand of oil, what happened is that the oil prices dropped right, because you know basic economics 101 right.

We need a lot of something and that there's very little demand of that something. The price of that something will drop, so price of oil dropped to a very low price. At a point in time before i put on the bed right, it was about 20, so i bought oil right thinking that you know hey. You know oil eventually will recover and the basis of my this so-called investment was because it's not the first time that we are met with a virus right like covet 19.

Previously we have to know the spanish flu. We have servers, we have sars, we have ma mers and stuff like that, all the different names right and each and every time we as a human race, we come out stronger. So to me right, this is no different. Eventually, we will overcome the virus and things will get back to normal and when things go back to normal demand of for oil pick up all right, oil prices should increase accordingly.

So i bought oil right around 20 price point. In fact, i thought it was 15, but my memory is wrong right based on the screenshot, you saw there's about 20, so i bought about oil, almost 100 grain worth of oil around 20 price point, and at the point of time i was looking to hold oil For a few years and sell it around the 60 or 70 70 price point around that 60 to 70 dollar price point, and what happened next is that within a few days the price of oil went negative, as you have, as you can see over here, it Went negative uh to a low of negative 37, so you might be thinking, hey, rainer. You know what happened man, so the reason this happened is that many traders right are trying to you know not take delivery of oil. So, basically, if you buy an oil contract, all right and the contract expires, you need to sell that contract and roll it over to the next month right, if not you'll, take delivery of the contract.

So many of us speculators speculating the oil market. We are not interested in taking delivery of oil. I don't know a few hundred barrels of oil in my garden, even though it can't happen right. So i'm gon na sell that contract right before it expires.

So many of us are trying to rush for the exit at the same time, because we don't want to take delivery of oil and when many people rush for that door. At the same time, the price of oil right go where negative. All right, in other words, right, you're, actually being paid to buy oil, but of course right you wouldn't get paid to buy all you wouldn't do it, because you probably don't have any storage capacity space to store your oil. Those need money.

So so many of us were caught off guard and we'd rush for the exit at the same time and that led to the collapse of oil, so pretty much uh. My broker liquidated my oil position and i incurred. You know close to 100 grand loss right on this oil trade, so the other side right. What are some of the lessons that you can learn? You know from my expense right, so lesson number one.

Is this you're richer than you think? So let me share with you what i mean by this. So when i had this loss right close to 100 grand, you know, i i couldn't keep it in my chest and of course i couldn't do this video and share with you my loss. You know because it was so raw. You know the feelings were still still painful, you know, so i think it's now close to almost a year, i'm doing this video now so it was at that point.

It was very raw, very painful, and i i needed an outlet to write to share it with somebody and who other than my wife. So i woke my wife up in the middle of the night and - and i told her you know - hey darling, you know i lost. I know uh close to six figure on this, this trade and she woke up and she was like stunned for a moment. You know just you know, just wake up and and enough that she she absorbed the news and she asked me a series of questions and that really changed my perspective of things.

She asked me, you know, will our lives change? I replied, no, nothing will change. Will we still be able to put food on the table for herself and the kids? I said yes, there will still be food, we still have you know a shelter over our head. I said yes, there will still be a shelter over here and then she said to me: no darling, don't worry, you know, i believe, you'll make it all back right. I have faith in you and, and it was it and this at the point, is when i realized that the one it pays to have a supportive spouse right to who support what he does and number two i'm actually richer than than i thought.

Yes, i had this six figure loss, it didn't feel good, but in the grand scheme of things, if you take a step back, you know i'd rather take ten steps back. Nothing has really changed at all. My kids are still healthy. They still can go to school.

I still can feed them clothe them. We still have a roof over our head. My wife still loves me. Nothing much has really changed, and that taught me to be grateful and and taught me right what it means to be rich, not just in monetary terms, but to be rich right in relationships, health and stuff, like that, okay, so number one.

You know some of you watching this right now. You might have incurred huge losses, maybe even more than me, but take 10 steps back and think right. You might actually be richer than you think number two next lesson anything can happen in the market. So i think this one is quite self-explanatory and this you know you look at this arena dirt right, but trust me right before this happened before oil price went negative.

I'm pretty sure right. If you ask anybody or anybody watching this video right now, you would say that an asset price can never go negative, you're crazy, rainer! You know nothing can go negative, but now that it has happened right, hey, you know anything can happen in the markets. So this should be a lesson for me for you for watching anyone watching this is that you know anything can happen in the market. So if you are, you know trading something that has a high probability of winning you're trading, something that you know you're so sure you know you're going to make money.

Well, just look at what happened to me. Anything can happen in the markets. I i didn't expect all to go negative. In fact, i expected you know all to rebound higher.

I had like 80 confidence that i should make money on that bet, but guess what i lost money, so anything can happen in the markets if you're the type of trader that you have like a 500 pip, stop loss a five pip target profit. You have been, you know, getting five pips target profit for the last few months. Guess what anything can happen in the market? It's a matter of time before that 500 pip loss, you know, hits your face. Okay, so number three.

Is this right never bet the farm, and i guess that's. The only consolation i had from this experience is that i didn't bet the farm i didn't sell. My house, i didn't mortgage, my house, i didn't, sell my kids to raise money and you know go all in on oil. No, i didn't.

I did none of that, okay, because if i did that right, you can be sure that you know i wouldn't be making this video right now. I might be making maybe 10 videos a day right to get paid for youtube as more money, i'm just kidding, but but you get my point right, never bet the farm because the market is so uncertain. If you agree with me that anything can happen in the markets, then it makes no sense right to go all in to bet the farm on any one idea. One trade one opportunity one investment idea or whatsoever: never bet the farm because anything can happen in the markets.

So don't borrow money to trade, don't trade with money you can't afford to lose, because the last thing you want is to to dramatically change your livelihood because of one greedy trait make sense. Next one was this a good bet, so this is a question that i asked myself repeatedly right after this oil saga. What i did was this the writing or the wrong thing to do, because this is not for most new traders, they would say. Oh, you know i had a loss on this rate.

This is a wrong decision. This is a bad trade. Oh i made money on this trade. Hey! That's a good trade there's a good decision.

No, it's not quite as simple as that, because there is something called the law of large number, so you can actually make money on wrong decisions and lose money on good decisions right play back the video. If you did confuse you right, you can make money on wrong decisions. Make money on, so you can make money on wrong decisions, lose money on good decisions. So ask myself this question.

What i did was it wrong and to kind of answer this question. I simulate this right across, let's say a thousand different multiverse. What, if you know across a thousand different timeline right would all thousand times the this oil market go negative and, and possibly maybe you know, half of it, 50 of them right would go negative and another 50 might not be. But with that question frame in mind right, i then asked myself, you know how could i make this bet even better or rather safer for me in case you know, wti does go negative again and that's where i realized that i should have expressed my opinion of Oil across different instruments - meaning don't just put all that hundred thousand dollars in the wti oil contract - i can put it across.

You know etfs across options. I can put it across the brand crude oil market, so this waste i'm kind of like diversified in that sense across the instrument right. So if one instrument like let's say wti goes negative, i've stiff money in other instruments right there could, you know, not go negative and you know even make a profit from it. So this is really one of the bigger lessons that i learned right.

So yes, this was a good bet to me, but what i could have should have done better is to express the bet right across multiple instruments out there, because oil right you, you don't just have like one one oil instrument called wt. I know you can express it in etfs options, brand crude oil etc. So a few uh questions that you might have for me and let me just answer them right before we conclude today's session, so hey raynor, why didn't you use the stop loss? So here's the thing right: this isn't a trade trade right. This is more like an investment to me.

I was prepared to hold this for the next three to five years and the only stop-loss that i had was. I was prepared to risk money. I can't afford to lose that was kind of like my stop-loss, because the only reason that i would sell that all trade is, let's say, there's another commodity out there that could replace oil. Maybe it's cheaper, it's better.

It's faster than oil right and then oil has no reason to you know be in demand anymore. Then hey you know. Maybe i would i would i will sell. You know that oil position that i had, but if that didn't happen right, you know i was prepared to hold this for the next three to five years, for you know things to go back to normal for the demand of oil to pick up right, and you Know to hopefully catch the rebound up higher and from the last time i just checked, the futures price of oil was about 50 plus dollars right now.

So, if only if only i didn't you know, get uh get so caught stopped out right, i'll, probably be sitting on six figure profit right now, but but if only right would have should have, could have it's not to put food on the table so yeah whatever. Next, one right: why didn't you follow your trading rules and again this isn't a trick to me this is more of an investment. So so, when i invest right, it's money that i'm prepared to lose so in a way, i accept the consequences. It's all on me.

It was money that i could afford to lose. It was money that was prepared to lose and, to be honest, i was kind of like 80 certain that i wouldn't make money, but in this case clearly i'm wrong. I lost money even though i was 80 confident and and yeah i live with it. I leave to share the story and hopefully hopefully you learn something out of it right and you can, you know, become a better trader, a better investor with that said, let's do a quick recap, number one you're richer than you think.

So this experience taught me that you know really i'm richer than i think i'm grateful for for great health, happy, kids, healthy, kids, my wife who's, so supportive - and you know i have a roof over my head number two anything can happen in the markets and if You know that anything can happen in the markets that should signal to you that you should never bet the farm, never go all in never borrow money to trade. Never you know, sell your house or whatsoever because of greed doesn't make sense and finally number four think in terms of probability. So yes, this is 100k loss to me. But if you ask me if such an opportunity were to arise again in the future, i would fake it right, but i'll be smarter about it right.

I would actually you know, uh express my opinion across different market instruments, so kind of like to be diversified. So with that said right, i hope you got value out of this uh, this video, if you enjoyed it, smash the thumbs up button. If you don't, then hit subscribe so with that's it. I wish you good luck.

Good trading! I will talk to you soon. You.