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  • Writer's pictureDragostin Kozhuharov

Markets aren't an annuity

‘The Markets aren’t an annuity’ is a quote from Peter Brandt’s interview for the latest market wizards book (Unknown Market Wizards by Jack D. Schwager), which stuck with me. If you haven’t bought the book, I recommend that you do so.

Here is what the quote conveys – the market won’t give you a set amount of money per month, it isn’t like a salary.

If you can’t cover your monthly expenses, the psychological pressure that you have to make a particular amount of money per month can lead to mistakes and overtrading. This is why in the beginning it might be wise to keep your job, or have some sort of other income on which you can rely on.

I find all of the above relevant these days because of course sellers, educators, professional traders and authors which focus on the pip/point per day mantra. Very few of them can show consistent results making the claimed pips per day. Maybe if they do an average through the year it's possible, but even then, I doubt most of them can back their claims by trading statements from live trading accounts.

The reality is that there are still opportunities in the markets to make money and to beat the market. It isn’t as easy as sitting in front of a computer for 15min per day, putting a SL and TP to give you 2:1 profit ratio and wait to get rich. Due to a variety of factors, one of them being that the markets are becoming more efficient, the opportunity won't come every day.

This is why we trade when there is an opportunity. How do you find the opportunity?

It is easy to say that you have a winning formula, and very noble to want to share it with other people – but the fact is – trading is hard work in terms of preparation, having a strategy, being mentally strong and disciplined.

What is even easier is to not have a formula, but to try to sell the lifestyle and mislead people into believing that markets are a cow which is waiting to be milked.

Keep working hard on your strategy, gain an edge and develop a strong mindset. That's what I will be focusing on in 2021.

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