Everyone Gets what they Want from the Markets

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• Every profit in markets comes from someone else’s discomfort, and understanding that truth changes how you create your edge.
• Great investors don’t seek to escape discomfort; they build systems that let them stay calm inside it.
• The ultimate trading edge self-mastery; knowing your limits, trusting your rules, and staying calm long enough for compounding to do its quiet work.

The markets look infinite, but they’re not. For every winner, there’s a loser, and every dollar of profit comes from someone else’s decision to take the other side of your trade.

It’s a fact many investors never consider. We like to think we make money because we’re smart, patient, or insightful. But a better question might not be how you make money. It’s really from whom.

In futures markets, that answer is usually clear. The counterparties are typically commercial hedgers: farmers locking in grain prices, airlines hedging fuel costs, companies transferring risk so they can focus on their core business. These players aren’t speculating. They’re protecting, and protection has a cost. Someone must be willing to take the risk they’re shedding, to absorb volatility they can’t afford to keep.

Professional traders have long understood that dynamic. They don’t imagine they’re discovering hidden patterns in the clouds. They understand they’re being paid to bear what others can’t. The market rewards whoever can take on fear, uncertainty, and complexity, and hold it longer than anyone else can tolerate.

The same is true beyond finance. Many advantages in life come from understanding where others reach their limits. The best companies profit from inefficiencies others avoid, just as the best investors endure periods others can’t stand. The best decision-makers recognise that risk is never destroyed; it’s only transferred.

What you earn depends not only on what you know, but on what someone else is willing to give up for comfort.

The Art of Living with Heat

There’s a word for discomfort: heat.

Heat is the unease you feel when your positions move against you, when your portfolio drifts into a drawdown, or when the noise of the world gets louder than your conviction. It’s not the same as volatility on a spreadsheet. It’s the volatility in your stomach, and the pressure that tests whether you really believe what you say you believe.

The great traders don’t escape heat. They live inside it. They understand that if you want to collect risk premiums, the extra return for taking on uncertainty, you have to tolerate feeling like you’re wrong most of the time.

In many strategies, that’s literally true. Systems built to absorb others’ risk can lose small amounts month after month, waiting for the moment when panic forces hedgers or speculators to unwind. When that moment comes, the payoff is enormous, but the waiting is agony.

This mirrors nearly every long-term endeavor worth doing: building a business, writing a book, raising a family, getting in shape. You lose small amounts of energy, optimism, and certainty for long stretches. The results are invisible until they aren’t.

Most people quit before the heat subsides. They want the reward of risk without the risk itself. The irony is that the heat is what produces returns. Without discomfort, there’s no premium to collect.

Learning to live with heat doesn’t necessarily mean ignoring fear. It means recognizing it as data, or as a sign you’re near the boundary of growth. Like an athlete in training, you have to distinguish between pain that signals danger and pain that signals progress.

That’s why rules and systems exist. They’re scaffolds for composure. The best investors use algorithms, position limits, or rebalancing schedules not to suppress emotion but to survive it. When the market hits 110 degrees, they can stay in the kitchen because they built ventilation in advance.

Rules and the Freedom They Create

Two traders can look at the same chart and see different worlds. One sees chaos, the other sees opportunity. The difference isn’t in the data but rather in how they relate to it.

Some people thrive on structure. They want the discipline of clear, tested systems, parameters that limit impulsive behavior. Others thrive on intuition, a sense for patterns, rhythm, and timing that can’t be captured in a rulebook.

Both approaches can work, or both can fail spectacularly. What matters is alignment between personality and process.

A trader who builds a system they don’t trust will override it the first time it hurts. A discretionary trader who lacks self-awareness will overtrade or freeze when stress rises. The mismatch between temperament and method is fatal.

This idea extends beyond trading. The most productive people aren’t necessarily those who copy someone else’s process. They’re the ones who design a structure that fits how they actually think. The writer who can’t outline shouldn’t force outlines. The entrepreneur who hates detail shouldn’t build a business that depends on it. The key is honesty and knowing what kind of stress you can bear, what kind you can’t, and building accordingly.

Rules are typically seen as constraints, but in reality, they’re a form of liberation. A well-built system frees you from the tyranny of momentary emotion. It gives you room to think long-term when everything around you screams short-term.

One paradox of markets and of life is that freedom comes from consistency. You can improvise only after you’ve built a foundation solid enough to stand on.

Detaching From Drawdowns

No matter how sophisticated, many systems spend most of their life in a state of drawdown. That’s the part few people want to talk about: Drawdowns test more than your model. They test your identity.

During such periods, people can mistake noise for feedback or convince themselves that something is broken because results aren’t immediate. They tinker, or they abandon their plans. They forget that just about every strategy, relationship, and creative pursuit has a time horizon that feels too long while you’re living it.

Many of the best market operators learn to separate self-worth from short-term results. They follow their process, not because they expect constant success, but because they’ve run the numbers and know what patience earns over a lifetime.

Psychologically, this is where many people fail. We crave certainty, and when we can’t find it, we substitute action, usually the wrong kind. Changing a system during a drawdown is like changing lanes in traffic every time it slows. It feels productive. It rarely is.

Detachment, then, is not indifference. It’s discipline. It’s the ability to act on data rather than feelings, to keep executing when the emotional reward has vanished. The best investors, athletes, and creators all share this trait. They trust the process even when it stops feeling good.

The Teacher and the Mirror

At some point, serious practitioners encounter a mentor who reflects their blind spots back at them. In trading lore, one mentor is Ed Seykota, a pioneer known for his blend of technical skill and psychological insight.

He once wrote that “everyone gets what they want from the markets,” meaning: the market gives you an external stage on which to reenact your internal patterns. The gambler finds excitement, the fearful find confirmation of danger, and the disciplined find patience rewarded.

That principle extends beyond finance. Work, relationships, and daily habits reflect who we are under pressure. We don’t tend to rise to the level of our intentions; we tend to fall to the level of our wiring.

The traders who last the longest, just like the professionals in any field, aren’t necessarily the most brilliant. They’re the ones who have come to know themselves well enough to stop fighting their nature. They build structures around it, design rules to protect them from their own instincts, and turn self-awareness into strategy.

Markets are efficient at revealing delusion. You can’t hide from your psychology when money is on the line. Every impulse is priced in and every insecurity finds expression. In that sense, markets aren’t just financial mechanisms. They’re mirrors. What they reflect, more than anything, is the human mind’s uneasy relationship with uncertainty.

The Universal Trade

Strip away the screens and algorithms, and nearly every market interaction reduces to the same fundamental trade: comfort for opportunity. You give up comfort now for potential reward later, or you buy comfort now at the cost of opportunity later. It’s true whether you’re hedging corn, building a company, or pursuing creative work.

Understanding that trade is the beginning of wisdom. It’s what separates those who view risk as danger from those who view it as currency. The question isn’t how to eliminate uncertainty. It’s how to coexist with it and to design systems, habits, and mindsets that make discomfort tolerable long enough for compounding to work its quiet magic.

At their best, the markets are a concentrated version of life itself. They remind us that success is less about predicting the future and more about surviving the present without abandoning your plan.

Risk never completely disappears, but if you can know yourself, follow your rules, and live with the drawdowns (financial or otherwise), the odds tend to tilt in your favour.

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This is based on an episode of Top Traders Unplugged, a bi-weekly podcast with the most interesting and experienced investors, economists, traders and thought leaders in the world. Sign up for our Newsletter or subscribe on your preferred podcast platform so that you don't miss out on future episodes.