The Pound collapsed 12% the next day, and global equity markets reacted sharply.

Looking back a decade later, being “right” on a big call undeniably feels good — but that’s only a side benefit.

Markets are humbling. What matters far more is having a methodology that defines your downside ahead of time, forces you to accept risk without ego, and keeps you grounded when narratives get loud.

The real utility of Elliott Wave and Technical Analysis isn’t about predicting headlines. It’s about recognising inflection points early, sizing risk small, and staying open to outcomes the consensus hasn’t priced in yet.

Here’s a look back at that conversation from 10 years ago: https://www.youtube.com/watch?v=zJV8TPW1otI

What is one market lesson from the last decade that has changed how you view risk today?

#Nifty #Brexit #GBPUSD

What is one market lesson from the last decade that has changed how you view risk today?

Pound sterling breaks out of a 4 year triangle

Cable’s monthly chart (above) with its Elliott Wave count shows that the currency is embarking on its 5th wave of decline. The target for this breakout is mammoth – Over the next 12-24 months we are very likely to see a level of 1.345 at the very least but will not be surprised if we see a level of 1.165.

When such a large text book pattern comes to fruition, clearly there will be some economic/fundamental tail wind supporting it. We are not going to bother ourselves with those and will leave it to the economists to decode that for us. However, we need to be aware  that such a large movement in a major currency is unlikely to occur in isolation. The Dollar will very likely strengthen against other major currencies. This is terrific news for Dollar Index bulls and bad news for many risk assets including precious metals and equities that rely on weak dollar forever.

Disclosure: I’m short sterling since January 2013 from 1.6113.