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The FX Bootcamp Guide to Strategic and Tactical Forex Trading by Wayne McDonell

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Russian Roulette

There are many strategies for this type of before/after guess news trading, but I haven’t found one I feel comfortable with. I work too hard to conservatively earn my pips throughout the month to risk any on a guess, even if the guess can pay off handsomely. It’s too much like gambling.
Extreme example: Russian roulette. This is a high-stakes game. Two players challenge each other. One will live and one will die.
The rules are simple. A bullet is placed into an empty revolver so that all the chambers are unloaded but one. The cylinder is spun so one of chambers randomly loads the gun. Is the chamber empty or does it contain the bullet? No one knows.
The first player places the gun to his head and pulls the trigger ... “click” (hopefully); maybe he lives to continue playing the game—or not. If so, it is the next player’s turn. They add another bullet, spin the cylinder and the second player places the gun to his head ... “click?”
As you can see, it’s a “winner takes all” game of chance. Like forex, it is a zero-sum game. One player will win only because the other player lost. However, I don’t feel comfortable with 50/50 odds: four loaded chambers and four empty. Now that is a game I would never like to play! That is exactly how I feel about betting on direction. If my odds are 50/50, I pass on the opportunity to trade. Like most Russian roulette players, I am too interested in surviving to enjoy the game.

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