When a veteran trader says the truth, people ignore it. But when an
impostor tells them what they want to hear, you see lots of responses. How many
times have you been blessed by what you want to hear?
There are many rich brokers and many rich IBs (marketers), but there are
not many rich traders.
Just like anything in life, they say trading is a zero (0) sum game (your
lost funds go to winning traders, and versa).
But the reality is, trading is a minus (-) sum game: Commissions,
negative swaps, spreads, uncertainties, efficient markets, small percentage of
winners, and high percentage of losers. Trading is clearly expensive.
You think because you can open a brokerage account within minutes, deposit
into it and start clicking or tapping, you’re going to be the next billionaire.
No Sir or Madam.
Trading is the 2nd most difficult profession in the world:
second only to the job of defusing nuclear weapons. Beating the market on an
annual basis, and for the long-term, is one of the toughest jobs in the world.
Beating the market seems easy in theory; but not in reality.
It’s almost impossible to beat the market on a long-term basis. Yes,
anyone can make profits now, and tomorrow or in few weeks or few months or even
a few years. However, to make profits on a long-term basis is almost
impossible.
That’s why I always shake my head whenever I see charlatans posting a
screenshot of a day’s or a week’s
results, trying to impress simpletons.
Longer-term Trading Success Is Elusive
What we’re talking about here is consistency… A situation in which you
declare profits on annual basis. It doesn’t matter whether the profits are
small or big; what matters is that you declare profits on annual basis.
Nonetheless, almost 99% of traders cannot achieve this because of psychological
problems.
There are billionaire hedge funds managers who made billions in the past…
They may make that for some years but not for every year.
Those who can really make permanent, consistent profits on annual basis
for 5, 10, 15, 20 and 30 years in a row are extremely rare and few. The rest
will just achieve short-term success and blow up and then disappear.
Whether you like it or not, there is nobody and there is no instrument
that can predict the next move of the market with 100% accuracy always. Gurus
and wonderful strategies are ultimately correct less than half of the time.
There are times when predictions and anticipation will go according to
plan, and that would bring a false sense of having found the Holy Grail.
Eventually, things will go back to even.
NB: These articles are not meant to discourage you from trading, but to
make you realize that the reality is different from what most touts want you to
believe. So if you seem to encounter roadblocks, performance ceiling (inability
to make profits beyond certain levels) and frustration, it is not because there
is curse on you, or there is a witch in your family, or your intelligence is
low or you are unlucky or something is wrong with you. It is how the markets
are structured to work.
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