Can't understand Risk/reward Problem!

[InwestorWkapeluszu]

Hi!

I don't know what is wrong with me but I can't understand how the process below works (on the left) :

On THE RIGHT it is obvious, he buys lower and sells for a bigger price (but here he didn't hit). BUT on the left? How can he buys at 1.0905 and get profit on Target at 60 pips below? He is telling that it was a winning transaction.

I must admit that I am very frustrated. I see that problem all around courses and I can't understand it even if they were just explaining it to me.

Please, can You explain it with the simplest language?

Thanks!

 

[Dowser]

He doesn't buy, he sells! Is that simple enough for you?

 

[Brumby]

Hi!

I don't know what is wrong with me but I can't understand how the process below works (on the left) :

On THE RIGHT it is obvious, he buys lower and sells for a bigger price (but here he didn't hit). BUT on the left? How can he buys at 1.0905 and get profit on Target at 60 pips below? He is telling that it was a winning transaction.

I must admit that I am very frustrated. I see that problem all around courses and I can't understand it even if they were just explaining it to me.

Please, can You explain it with the simplest language?

Thanks!

It is a hedging trade driven by a CAD economic release. The premise of the trade is that the economic release will move the CAD but the direction is unknown because it will be data dependent. Therefore two pairs are selected with the idea that the data will produce one winning trade and one loosing trade. With a RR of 3:1, the idea is the net result will result in a net win situation in terms of pips as in the example given by the trader. Also the strategy is to enter the trade before the event. It is a convoluted way to trade a market event.

A simpler way is just to take a straddle trade and let the event stop you into a position.

 

[barjon]

Yes, on the left he has sold (short)with a target of 60. Price went down and it was a winning trade. On the right he bought (long), price went down and he lost 22.

 

[danielelton]

It is just a hedging. you can not maintain it because of spread. spread makes the difference here

 

[NVP]

please keep trying to buy on such signals .......makes me more and More money whilst i pile on the shorts

N

 

[itspossible]

When I make money, it normally comes from the shop. This is not ideal because the shop will eventually get pi**ed off. I run the risk of being kicked out by the shop or they will find ways to refuse my withdraw request.

If I can make money from anyone but the shop, that will be great. Can you offer some clues as how I go about making money from people like the OP instead ? It would be perfect if I could take money directly out of the OP's wallet for instance. I won't mind paying the shop a commission in the process since they have a cost in running their business. I don't want to see the shop going bankrupt, that would be same as if I get kicked out of the shop. To be shopless would be a disaster.

 

[InwestorWkapeluszu]

To be clear:

He sold and didn't lose 60 pips - am I right?

 

[Dowser]

To be clear:

He sold and didn't lose 60 pips - am I right?

Yes!

google: 'short selling FX'

 

[mpups]

To be clear:

He sold and didn't lose 60 pips - am I right?

hello mr kapeluszu

you need to learn what these two words mean in the trading world:

1 LONG
2 SHORT

then you will understand

kae

 

[InwestorWkapeluszu]

hello mr kapeluszu

you need to learn what these two words mean in the trading world:

1 LONG
2 SHORT

then you will understand

kae

Thank You all for the help.it was mind blowing operation for me. You are the best. Solid and quick answers.