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 :)
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 :)