This comes up a lot and I just want to make sure I don’t have it wrong…
in the babypips school, for example here babypips dot com fwdslash school fwd slash riding-elliotts-waves dot html, when it describes the chart at the very bottom of the page, it says that by selling before the dip, you net a couple thousand pips that day.
I have no problem understanding the dynamics of ascents, jumping on at the bottom and jumping off at the top. Because of that, though, every time they mention in a lesson somewhere that you made lots of pips by selling at a dip, it looks to me like what they’re really saying is either
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you saved your butt by jumping off before the dip, in which case, you didn’t make hundreds/thousands of pips at all (they like to use generous examples I notice) you just made whatever pips were made from the last upward spike to that sell point before the crash. If this is correct, then theirs is a deceptive description of what really happened. All you did was avert disaster. You didn’t really “make” in this case a few thousand pips at all.
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you decided to buy the opposite currency of the pair you’re trading (which makes my head hurt to think about how you’d do that if you’re holding onto these major lots of the first currency) because a large descent like the one I pointed to above works in reverse if you switch to the opposite currency of the one you’re trading, and you could have legitimately made a few thousand pips that way. However, I don’t recall any lessons describing this kind of dynamic.
So I feel like I missed something. Why are they talking about “man, you made so many pips on that sell!” when all you did was just successfully exited a sinking ship?