I am often asked about the potential to make money in the trading business, and it is not an easy question to answer. Above all, trading takes discipline and experience, so the learning curve can be very steep if you approach it without the proper training and mind set. Further, a well trained ES emini trader has to learn to control his/her emotions, which is easier said than done. The always dangerous feeling of greed can be an account-buster if you get sloppy or your technique falters, which is often the result of overconfidence. The result of overconfidence is entering shaky trades or poorly thought-out trades. Overconfidence in your ability is a very real hindrance that can cut into your earnings. The good news, on the other hand, is that with proper training and self-discipline you can be a very effective trader.

But you said you were going to tell us home much we can make...

Initially, you may may want to stay conservative and only trade a single contract, and that is a very good idea. I seldom risk more than 5% of my balance on a given trade. As a trader I am looking to capture whatever the market has to offer, and for me that is about 5-7 points. Those are my goals on the ES emini contract. I think they are realistic and attainable goals. Trading is not a get rich quick scheme, and if you approach your trading like you need to conquer the market every day you will quickly learn the wisdom in this thinking. I prefer to pass on a trade that I don’t feel confident about than take a trade that I am not comfortable with, or my trading methodology doesn’t confirm.

One point on the ES Emini is worth $50. There are 4 ticks in one point, so each tick is worth $12.50. Logically then, we can surmise that each tick is 1/4 point. Trading one contract and shooting for 5 points would yield $250. (5x$50) This is only trading a single contract, of course trading two contracts would double the amount you can make, it also doubles the amount you can lose, and that fact is worth considering.

Whenever you consider how much you are making it is wise to consider how much you could lose. There is no 100% trade, there is always a chance any trade could turn and go in the opposite direction you expect. Of course, we always have out stops in place, but on this trade I would probably set the stops somewhere around 3 points. My exact stops would be determined by the quality of the trade, but I am comfortable at that level. So you are risking $150 dollars on the trade. Is the trade worth $150? If it meets the criterion in your trading methodology, sure it is...and you take the trade. So you have risked $150 in order to make an unknown amount, or whatever target you set as your profit level.

I think you can see that "how much money can you make?" is a tough question to answer, at face value because the amount you can make is unlimited, but so is the loss. That’s why experienced traders scale in and out of trades and use stop loss order and limit orders, they plan for the unexpected. I feel I can take at least 5 points a day out of the ES emini, most days I do, some days I do far better, and every now and then I do far worse. That’s the way the game is played, and with some skill and training your expectations should be the same. Depending upon your skill, you should be able to do the same thing is you trading, but don’t approach trading until you are committed to learning a system and have the self-discipline and emotional control to execute the system you have learned.

Then you will know how much you can make.