September 16, 1992: George Soros "Broke the Bank of England"Analyzing George Soro's speculative trade on the pound.
Event:
Sept. 16, 1992 (Black Wednesday or the Sterling Crisis) was the day speculators forced the British government to pull the pound from the ERM. This trade was backed by large sponsors, such as the Geroge Soros and other groups of investors and hedge fund managers: Paul Tudor Jones and Bruce Kovner; placing bets against a central bank's capability to maintain the relatively "stable" value of its currency. According to some sources, Soros started to short the British pound late 1991 after volatility increased over the year of 1991 and it became overvalued. Let's say 1.8100 all the way up to 2.000 in August 1992. However, after observing the chart and I agree more with Investopedia that says, "it was during the summer of 1992 when Soros began building a short position in the British pound." And "German officials also made public statements that realignment within the ERM might be possible in mid-September." Then, "in response to these comments by German officials, Soros decided to increase the size of his bet massively. He went from a $1.5 billion position to a massive $10 billion in the middle of September" (www.investopedia.com www.forbes.com).
So, this means, around June 1992 to August 1992, between 1.8500 to 2.000, George Soros started to short the pound. This makes more sense. But, in September 11 -14, 1992, when the price started to fall fast and brake through the 50 EMA and horizontal support (and broke through the ichimoku cloud), Soros' position ballooned to 10 billion.
Technical:
On September 16, 1992, there was a 5%+ drop in GBP/USD one day in the major currency market.
Using my own strategy with other patterns:
September 11 -14, 1992, when the price started to fall fast and brake through the 50 EMA and horizontal support and DQed after visible dRd and ExDiv1. Price closed below and broke through the ichimoku cloud, but no tenkan-kijun yet.
Other patterns that occurred was a breakout signal and break of support.
Stage 3 ichimoku signal developed on the day on Black Wednesday (the Sterling Crisis), September 16, 1992.
After the dRd and ExDiv1 (on top) with a Crown DQ (the volume is not available to validate the pattern in this chart), there was a pb btw. 35% to 68% fib and/or horizontal resistance below cloud, which was also a 5EMAs MACD set-up. Then, a candlestick signal appeared: first a doji, then an evening star and a shallow pb signal.
Comment:
Even with a trade backed by large sponsors such as the famous Geroge Soros trade ("breaking the Bank of England"), wait for a set-up after the fact. A stop loss above 2 or 1.93 would have given me a good and conservative 1:1 or 1.5:1 reward:risk ratio or hold on to the position until a trailing stop exit. I think Soros only went 2:1 on margin (so, if he had 4 or 5 billion according to Druckenmiller, then his investment was about 10 billion. Others say 10:1 margin). Since the currency dropped about 2500 to 3000 pips in one month, and Soros' position was close to 10 billion, let's say 8 billion, then Soros would have had a short position with about 80,000 lots. If he had a stop loss above 2.00 and risked a maximum of 5% of his portfolio leverage size, then he would risk about $50,000,000, and his bet would control about 80,000 lots. A price dropped about 2000 would have netted him 1.6 billion dollars. If he had commanded 40,000 lots, then it would have taken the price to drop 3000 pips to make about 1 billion dollars. From the high of September to the low of October 1992, the price dropped about 4469 pips. I doubt that Soros caught the very top. But the drop from September 14 to the end of October was 3000 pips if he closed the trade by that time. It was reported in November that he made 1 billion in one month, so, maybe he closed the trade that month. And the price started to go flat and bottomed out mid-November and December 1992. Soro's reward:risk ratio in this trade would have been a 1.5 to 3:1 rr. It is a normal trade for an astute speculator. There is no greatest trade in the universe. He had billions to invest already. From a percentage growth perspective, this is achievable for a savvy investor. Others besides Soros made the same trade. The total time it took for his portfolio to double (or more) in would be about 5 months if he started building a position in the summer of 1992, not 1 month. But after the trade started to work in his favor, it took 1 month for the trade to work out to completion. Well, if one is familiar trading his own set-up, this is normal. It is up to others to call you great. Soros gained a sense of noticeability due to the size of his position and status. However, if it were an individual investor savvy in trading his own strategy (and not a hedge fund), then no one would have notice.
Further comments:
A trade backed by large sponsors helps.
Other views with other indicators:
Regular ichimoku -
Guppy -
BBSR Wave with 50EMA -
SAR trailing (SAR start: 0.01; increment: 0.002; max value: 0.2) -https://www.tradingview.com/x/6PMNzwvz/
Soros
The Rig "blue horseshoe loves the next 100 baggers to the moon"it's ike buying a pair of jeans .. and not using it
probably the next big thing when oil hits $100 or ARAMCO debuts soon
it's all a cycle for the benefit of the few greedy players
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notice the VOLUME underneath relative to previous years..
those whales splashing discretely while price at sub $2 is at rest
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thieves like to accumulate when no one is minding
"we follow the money that follows the money folks...."
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all the best and best of years ahead...
BTC Long, Market Shift? Volatility expectedMinor update to the previous idea.
BlackRock BTC Trust could change things, makes me wonder if they change their mind on whether it's ESG compliant.
This trade is more of a double-edged sword that is more profitable in longing for volatility rather than direction considering market forces at the moment. Expect at least a +- 20% price swing. Either we break through the first resistance band of 27k-32k and continue forward with a close above 26k today, or we drop to close the previous gap from 21.8k -20.8k with a close never reaching over 27.4k.
For now, we are at risk of seeing 20k considering current prices are under 27.4k and the sp500 being this overbought in the short term that could drag btc with it if a bull trap is in place in tradFi (not confirmed yet, mean rev. signals won't work). Overall, I'm bullish on BTC short term (possible that it could make a run up before sp500 contracts), and still remain bearish on SP500 long term (might switch to neutral if the west releases dependence on its manufacturing base toward China/the east, and innovation continues in the tech sector). Altcoins might not be able to catch up with BTC on the upswing, but most likely on the downswing if it so happens.
Trades:
Long #1
Entry: 26k
SL: 24k
TP: 34.5k, 40k
Long #2
Entry:20k
SL:18k
TP: 34k, 40k
Short
Entry: 26k
SL: 29k
TP:22k, 21k, 19k
Bitcoin and Reflexivity: a step back from the chartsGeorge Soros' general theory of reflexivity states that investors don't base their decisions on reality, but rather on their perceptions of reality. I will attempt to apply this theory to the Bitcoin asset bubble.
First, assume that Bitcoin is in a positive reflexive feedback loop. There are two components to this: an underlying trend that prevails in reality, and a misconception relating to that trend.
Here, the trend and the misconception positively reinforce each other and the trend tends toward a dynamic disequilibrium.
In the case of Bitcoin, the trend is its inflating value and the misconception is its public perception as a viable store of value (SoV).
The relationship between Bitcoin's inflated market value and its perception as a SoV is reflexive, so they positively reinforce each other to further drive up the price of Bitcoin.
I think this narrative is driven largely by inflation expectations. If the fear of hyper-inflation eases, this trend and misconception will positively reinforce each other back toward equilibrium. If inflation expectations continue to rise, bitcoin will continue to inflate in value indefinitely.
Reflexivity also suggests that it is rational to invest into an asset bubble in a positive reflexive feedback loop. I, therefore, think it is well justified to be in Bitcoin (and crypto assets as a whole) until the trend shows signs of reversing.
Some of the most famous Soros investmentsHere are some of the most famous bets by the man that had years where he single-handedly made profits comparable to the annual GDP of countries like Chad, Zimbabwe, Haiti, and that is held responsible by many (delusional dunning kruger sufferers) for bringing down entire countries.
==> Thai Baht short right before the Asian financial crisis: SEA tried to abuse the system and paid the price
Soros loves to look for dumb governments putting their hairy little hands into a country own business, such as with tariffs & capital controls.
He also is (well maybe was) always on the lookout for dumb central banks pegging their currency, having forced floors.
South East Asian countries did such things. The socialist governments helped out exporters with stimulus packages and a peg of their currencies to the USD to make it more favorable to exporters, to gain competitiveness against foreign countries.
During the years leading up to the crisis they also accumulated huge foreign debt, I do not mean as assets but liability, they had massive debt.
In 1995 governments of the USA (hey Bill Clinton years), Germany & Japan agreed to let the USD get stronger against the mark & yen.
SEA banks/governments/economies were subject to more and more pressure, and in 1997 the ponzi scheme ended up collapsing under its own weight.
Malaysian Prime Minister-Baghodler angrilly atacked Soros making crunchy anti-semitic comments, Soros explained that he shorted them months earlier and was actually a buyer during the price fall. Not sure politicians are intelligent enough to comprehend that subtility tbh.
I think this is when Philippines banned him for life.
Not very smart people probably think successful speculators are "wizards" that practice dark arts and some other silly supersticions 😏
This is when the west gave all kinds of lessons to asian countries on why they should not have too much debt, print imaginary money, take the pill, not do QE, etc... Everything those countries did themselves a few years later.
==> Yen & Nikkei: Ridiculous media & government fear mongering about Fukushima meant discounts on Japan
Back in 2011 there was a nuclear leak in Japan (Fukushima) and oh boy here we go. All the dum dums making nuclear fallout calls.
Fukushima was a JOKE, I can already hear "noo huge deal how dare you downplay bla bla bla" by idiots that cannot admit they were wrong.
"The truth is finally coming out. Fukushima was a maximum radioactive event the worse possible level 7 let me come at you with my technical terms to make you scared and scientists agree you are not a science denier are you? The gov tried to hide it but we know the truth now it is much worse than Chernobyl and there will be a nuclear winter" yawn this aged well 😏
www.independent.co.uk
www.sortirdunucleaire.org
What I am calling a joke/hoax is all the pathetic claims made around it, not calling the accident itself a hoax duh.
We are still all around and the yen got inflated and the nikkei is in a bull market since 2012. When the US & global economy will crash it will prob still remain above that bottom.
==> Herbalife: Same as CDO & MBS bears, Tesla bears, they get ran over. Soros knows this and so he bought
Another crowded short story. Hordes of angry bears went heavy short on the MLM scheme, what they failed to realize is only idiots invested in it, and they cannot make money off of each other maybe. It is what it is, noobs never sell. In 2018 or 2019 Herbalife ended up getting in trouble with the SEC, and the share price crashed into a straight line 45% (.618) and then crashed again. And angry herbalife bagholders were featured on @bagholderquotes.
As we are in a robinhood bubble the price went back up strongly again. Dumb retail is celebrating "hurray we showed them who boss" proud they won the battle of "who is the dumbest sucker out there to buy & hold worthless garbage". Terminal phase of every bubble.
Druckenmiller has only made a few percents since the market bottom hahaha this guy sure painfully learned his lesson in 2000.
I wonder if Dave Portnoy the self proclaimed "greater than Buffet" new stock captain has herbalife in his favorite stocks list?
Sold the bottom and bought the top like a bawss. When this guy is wrong he is REALLY wrong.
He lobbyed governments to shut down the economy right after he went short and he made money, people are blaming him.
They might be right, maybe cheating is the only way he makes money.
He is probably trying hard to get fame for a really big win, only way to wash away the shame of his enormous mistakes.
==> I do not know much about Soros losses, but there are other ones to look (laugh) at
Bill Ackman most famous failure was his absolutely disastrous Valeant bagholding episode, which I described back in this idea in 2018.
Yes, I remember every single one of the 763 ideas I posted. You need good memory in this game. All the updates too, of course.
Price keeps falling but hey "I am right" (he was very very wrong too). Charts says bye bye and he holds the bag and hold and adds and holds.
By the way both Druckenmiller & Ackman are billionaires so there is place for mistakes even awful ones.
Do they deserve to be billionaires? Probably not. But they got there. Somehow.
Probably being good at marketting and at the right place at the right time and leeching off great investors like Soros Icahn etc.
And alot of leeching fees off investors by just shadowing markets and being slightly right in a normal distribution :/
Or every one else is so emotional, dumb, bad, that anyone that isn't a complete dog can make money 🤷♂
Ackman apologized for losing his investors money (ah so this is how, he takes 20% from the wins but investors eat the losses what a stupid system) and he said he "learned his lesson".
Just look at the returns, he really just shadowed the S&P with leverage from 2004 to 2012! Then he started speculating at first as usual it went straight up and he probably got hyped, and then it went to zero xd (back where it started), it went straight up since 2019 maybe he learned how to trade after 20 years, or maybe the stock market will not go straight down like in 1930 but rather sideways and he will get bled out.
It is amazing that some people manage to amass billions in investors/suckers money while doing nothing, until 2012 the returns were not uncorrelated returns, just shadow but higher with leverage. I guess that gets the attention of all the greedy people. "More number go up = better!".
He probably has a good understanding of stocks and has some qualities (other than marketing/investor seduction). Or can just be bad do nothing and just got lucky not to blow up yet. In 2004-2012 when he was shadowing the market he did not lose as much when it went down, but this is just 1 thing, can easilly just be luck. 1 decision = random luck. Many = not luck. Since 2012 his PNL really just looks like a random myfxbook noob. We'll see. They are at 41% ytd and made 50% last year. Luck not luck? Him? His PMS? You really can't tell. Anyway there is no shortage of people to point & laugh at 🤭 Davey Global Day Trader... Delusional Dunning Kruger to the max "I am a legend the master the captain of the ship".
static.seekingalpha.com
I wish there was a video of Soros wrath when Druckenmiller got excited by the dot com bubble and messed up and then got kicked out.
I just want to see an angry Soros get all verbal and all.
Thanks Wall Street, I have come back #HODL #BTCUSD BTCUSD BITFINEX:BTCUSD COINBASE:BTCUSD CEXIO:BTCUSD
MAKE IT SIMPLE. In spite of the infinity of tools and so many analyzes that seem spectacular, in the end are useless.
BTC
Wall street still waiting for SPX ES1! consolidation, not the best moment to take position, sentiment is not good and many doubts about NEW issues: Trump, geopolitical risk, Syria, Russia, Cold War.
Good moment to consider alternative markets or another options although difficult to decide because these matters affects entire economy, even cryptocurrencies #BITCOIN BTCUSD are on the list of alternatives, who'd say it.
Positive points: Volume have come back, downtrend cartel's line is not resisting anymore and looking to overcross some importance resistances (EMA50, EMA100, SMA200) and important daily stochastic intersection.
Dear establishment, welcome:
www.bloomberg.com
www.businessinsider.com
www.coindesk.com
www.reuters.com
www.reuters.com
Bad news for shorts?Volume means activity. These volume spikes concern me - something happened. While I will never find out what exactly that was, judging by the fact that the first spike occured almost on the very top (left shoulder, even before I was bearish on this pair - which makes sense) and that we have just had the second spike at the bottom, after the pair fell considerably, I suppose... someone made a lot of money. Now why this someone has just closed his/her profitable short here? I guess he/she knows something. But what?
Actually I really want cable to drop to 1.35 and below, if possible. Sorry, good people of the UK. Hi, Mr. Soros!
P.S. Spikes like these can also be found of other pairs. And put together they make little sense ;)
Soros did not make GBP crash in 1992. He counted EW correctly!It's not a trading idea, more of a a history lesson :-)
Today while browsing the web I stumbled upon a well known story how Soros and his friends heavily shorted the Pound in 1992 and forced the government into surrender, pocketing more than a billion USD of gains. For the British Pound, this can largely be viewed as a black swan event - however, if we look at the chart and apply Elliott wave count, it becomes clear that GBP rise was over anyway as the zigzag correction was near its completion. The last subdivision of the zizzag, which was also a zigzag, completed equal A and C waves, so everything was set for a reversal.
What made Soros successful in this deal is that he entered the market at the right moment. The black swan event worked out because the market was ready! Had the market been in a different place of the curve Soros could have bet all his fortune agains GBP and the market would just go by as usual.
Black swans don't make the market move. They occur only when the market allows them to do so. And I believe the technical analysis can help is find the right moments.
Just a thought :)