Are You Trading Stocks, Futures or Forex in 3D or 2D?

An example of this was when I received an email from someone stating that one of his students was consistently making 1000 pips a month trading forex (for stock, options and futures traders, in forex country this is a lot of pips!).


What I thought immediately after reading this was ‘so what’! Now don’t get me wrong, I have a lot of respect for this guy sending me the email, but it reinforces a belief I have that too many traders see trading as 2 dimensional. Let me explain…


If I was guaranteed to make 20 pips a month, this is guaranteed, without fail; then what is that worth to me? If there was no limit to the number of lots I can trade, what’s stopping me from trading 20 lots or even 50 lots? Well it’s the amount of capital and leverage I have available to me of course, but that’s not my point.


If I am able to trade 50 lots on this guaranteed 20 pips a month then that is worth $10,000 a month to me, just on a gain of 20 pips. Which do you think will be harder to achieve and more time consuming, making 20 pips a month or making 1000 pips a month?


The same goes for ROI per month and this may relate more to stock, futures and options traders. I get calls all the time from traders wanting to learn how to make 20-30% ROI per month consistently. When I ask them why such a high return a common answer is ‘I only have a small amount of capital, such as $10000, and I want to make $2000-3000 per month’.


If you think in ‘3D’, then which do you think would be easier to achieve by way of time, effort and learning, making 20-30% per month consistently or starting out with say $20000 and making 10-15% consistently per month? Either way the desired result of $2000-3000 a month is achieved.


If your reply was, “well, I only have what I have (say $10,000)”, then my response to you is; in the time it will take you to learn how to make 20-30% consistently every month, you would have been able to save well more than your original capital.


When I was a student of Peter Bain, one of Peter’s shining examples of a success was a student from South Africa who had taken his trading to the point where he was consistently making $50-55K a month! I can tell you now, he didn’t have to make a 1000 pips month to achieve this, in fact it was less than half this. This student learnt how to think in ‘3D’.


Dean Whittingham created A Traders Universe – Trading System Development in 2005 as a resource site for traders of all levels, with education, courses, brokers, tips, free videos, newsletters, trading systems, simulations and a free 7 step process for building a profitable stock, futures or forex trading system.

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