To illustrate, look at the PK from silentscorp's earlier picture:
Your sub is heading due North. The target is at about a 52 degree bearing, in front of you to the right. Since you are heading North the relative and true bearings are the same (the target is Northeast of you)
The target is heading 90 degrees. If you were on the bridge of the target, you would see your sub at a relative bearing of about 144 degrees (behind and to the right). Since you are heading East, that translates to a true bearing of about 254 degrees (i.e. you are Southwest of the target).
The arrow leaving your sub indicates your torpedo will take a 70 degree turn to the right after leaving the tube. This sharp turn is necessary since the target already to your right and heading away. Note that an ideal firing solution usually has the torpedo not turning much to either side after firing (i.e. the arrow leaving your sub points to about 0 on the inner dial).