GREAT EXPECTATIONS

Whenever I start teaching someone how to trade the Forex the most common question they ask is “how much $ can I make each day doing this?”. I always smile and shake my head once they inevitably ask this question. Everyone always asks this question (I remember asking this question too when I first started), and when you start teaching your friends (if you haven’t already) then you too will get asked this question. Pay attention to how I answer it so that you too can give your protégés the correct answer.

It is first of all incorrect and inappropriate to state what can be expected in terms of dollars earned. Dollars (or whatever currency you are accustomed to) is by no means a relevant measuring unit to make comparisons with. If I told you that ‘John’ scored $50 today whereas ‘Simon’ scored $500 it would be understandable that at first glance you would more impressed with Simon’s results. But hold one, what if I then told you that Simon just scored a single 5 pip scalp trading 10 regular lots, but John made three trades scoring 10 + 17 + 23 pips trading just one mini lot for each. With whom would you now be more impressed with? Your answer should now be John. He score 10 times more pips than simple Simon. Pips, as you should now understand, are absolutely relative (meaning that you can make comparisons) but dollars are not because dollars are contingent upon how many lots you can afford to trade.
So now here is the answer you are looking for. A conservative scalper should be able to consistently (and by now from reading my other eBooks you should understand the significance of the word “consistently”) average 20 to 60 pips a day (depending on how skillful you are, and how aggressively you trade). For the following examples we’ll use a realistic 40 pips. (Actually you could do much better than what I just suggested, but I’d rather you start off with a low expectation and then let you find what your average is – which could be much higher.)
Ok, so how many dollars can this mean to you? Well here is where you write your own paycheck. It all depends on your account size. If using proper equity management principles all you can afford to trade is one mini lot then if you were to hypothetically capture 40 pips on average on EUR/USD then you would have made an impressive forty bucks. Ok, it’s nothing to get excited over but assuming you kept up that average for a full month (20 trading days) then you might have captured 800 pips for an $800 profit (surely it sounds better now – and an 800 pip month is impressive by anyone’s standards).
Continuing the above hypothetical scenario, if you were to trade 5 mini lots then you’d be averaging $200 daily or $4,000 monthly - - 1 regular lot (equal to 10 mini lots) would be $400 daily or $8,000 monthly - - 5 regular lots would be $2,000 daily or $40,000 monthly - - 10 regular lots would be $4,000 daily or $80,000 monthly. You get the idea.
I could seriously answer you that you that you could expect to earn $40 a day and you’d immediately lose interest (too bad for you because you’d miss a great opportunity) or I could casually state that you could expect $4,000 a day which might blow your mind (depending on what your current income level is if you are Donald Trump then this chump change would bore you) and you’d probably start suspecting that I smoke crack (I don’t, it’s just a derogatory slang expression implying absurdity).
So now do you understand why it is completely pointless to ask how much $ you can be making each day (on average)?
As a beginner assume that you’ll only average 20 pips daily (yes, it’s realistic) and then calculate your own “paycheck” based on the account size you expect that you’ll be trading with (applying proper equity management principles).
“Why do you talk about the money you can make earlier in the eBook and on your website rather than talk about pips?” Simply put, most people wouldn’t understand the significance of potential pip gains, but they sure can recognize the meaning of dollar figure examples. Any dollar amounts ever quoted on my website or in any of my writing is simply a realistic “carrot” to get people to realize that trading Forex can be a very profitable activity. So stated dollar amounts (always hypothetical of course) is just so that people who wouldn’t otherwise understand the opportunity can start realizing that this could possibly be for them. Let’s face it, everyone, surely including you (and me too), first gets attracted to Forex for the income possibilities. So when people initially ask you how much money one can earn trading Forex you can simply give them some dollar examples to spark their interest, then when you start teaching them you then explain that the dollars are irrelevant and that only pips really matter.
Source :eBook By Robert Borowski