Ghost Chronicles

Trading & Everyday thoughts. Not a financial advisor. There are risks to trading and investing, never invest more than what your're willing to lose. Risk management is the key to everything, not just trading and investing.

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Trading Journal

Entry 16

Admiral Group Shares.

Currently plummeting from an ATH of approx £37.

Fib sequence to approx £23.70 - this could be reached near December 2021. 

200 EMA lurking around £24 region and there is a support region at approx £23 region. 

Next earnings result is due on 03/03/2022. Strong earnings could bring price back to £30 region.

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Trading Journal

Entry 15

Dividend Projection For Admiral Group Shares 

Average for Dividend rate calculated - sum of all payouts divided by 23.

Average for ‘Dif To Prev Payout’ - sum of all difference divided by 22.

Projected figure for Oct 2021 payout calculations: 

> Dif = £0.86 - (£0.61 + £0.035) = £0.216

- Dividend Rate = £0.86 + £0.216 = £1.0759

> All Neg Dif value = £ -0.3260 / 9 = £ -0.0362

-  Dif = £0.86 - (£0.61 + £ -0.0362) = £0.286

- Dividend Rate = £0.86 + £0.286 = £1.1462 

> All Pos Dif value = £1.093 / 13 = £0.0841

- Dif = £0.86 - (£0.61 + £0.0841) = £0.1659 

- Dividend Rate = £0.86 + £0.1659 = £1.0259

> Dif =  £0.216 +  £0.286 +  £0.1659 / 3 = £0.223

- Dividend Rate = £1.0259  +  £1.0759 +  £1.1462 = £3.248 / 3 = £1.0827

-  £1.0827 -  £0.223 = £0.859

> Low Dividend Value = £0.859

> High Dividend Value = £1.0827

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Trading Journal

Entry 14

Cleaned up the charts a bit.

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Trading Journal

Entry 13

DOTGBP still holding levels. Nice move back to £8.951 would be ideal for a buy

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Trading Journal

Entry 12 

Respectively - DOTGBP, CHZGBP, XRPGBP, LINKGBP

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Trading Journal

Entry 11

£33 level has been broken for Admiral Group.

Next targets: £36, 40, 46

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Trading Journal

Just some thoughts on how I've developed my trading style over time. It’ll include some facts about the markets and what not.

I’ve usually found that Monday 3pm is the best time to analyse charts. When starting off, i started trading 1 currency and 1 commodity at a time. As the saying goes, “trade smart, not often”.

Given that the Americans held most of the world gold (through globalization, killing, pillaging etc)., the USD became the default currency for gold.

Should you want to carry out an intraday trade, then major pairs are the best as they usually have short movements. Some of the major pairs are as follows:

EUR/USD - Controls 30% of the market movement  GBP/USD USD/CAD AUD/USD USD/JPY USD/CHF NZD/CHF

As more liquidity entered the market, this lead to the formation of minor pairs. The minor pairs have a lot movement and here are some of the most traded minor pairs: GBP/JPY GBP/AUD EUR/JPY NZD/CAD AUD/CAD EUR/CAD

Broker Commissions  

Now let’s talk about brokers. To trade a lot of these currencies and commodities you’ll end up utilizing a broker. Now brokers usually make their money based on ‘spreads’.

The spread represents the difference between the buy and sell price of an asset. The price at which you buy (bid price) is always higher than the price at which you sell (ask price), and the underlying market price will general be in the middle of these two prices.

Trading spreads are implemented by market makers, brokers and other providers to add costs to a trading opportunity, based on supply and demand. Depending on how expensive, volatile and liquid an asset is, the spread will fluctuate along with an assets price and trading volume.

For example, let’s say that an asset has:

A buy (bid) price of 1449.5

A sell (ask) price of 1451.1

The spread = difference between buy and sell price = 1.6 points.

Depending on any potential news, brokers can increase the spread.

The Average Daily Range (ADR), is an indicator that can be used to obtain  data on a currency pair’s daily volatility. Traders can use the ADR to visualize potential price action outside the average daily move. When ADR is above average, it means that the daily volatility is higher than usual, which implies that the currency pair may be extending beyond its norm.

Take a look at this link that explains ADR and how it can be used for setting up intraday trades: https://forextraininggroup.com/using-adr-average-daily-range-find-short-term-trading-opportunities/

Essentially Average Daily Range (ADR) shows how much movement has occurred (i.e. each candle being formed). With regards to the minor pairs - they have a high daily range and high spread and with major pairs - low daily range and low spread.

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Trading Journal

Entry 10

Prediction for Admiral Shares. Looks like rejection of £32.46. If it breaks £32.46 then next target is £33.40, thereafter £35.95. Target for £43.70 is until 2024, possibly August 2024. 

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Trading Journal

Entry 9

Just looking at XU - if it breaks 1846, then it might head to 1812 and if it fails to bounce from there, then it could go to 1780 bounce from there and go upto 1936. 1730 would be ideal SL region.

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Trading Journal

Entry 8

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Spook’s Journal

Entry 3

Have started listening to Meditations by Marcus Aurelius.

Highly recommend it. Aurelius’ thoughts are written they way one common man could relate to another common man. He never intended for his personal thoughts to be published. But little did he know that his the effect his writings would have on the future to come.

Interestingly, these thoughts of his came about during a time where a plague was ravaging Europe - ‘The Antonine Plague’, named after Aurelius, was probably caused by a strain of the smallpox virus. The Antonine Plague was  estimated to have killed up to 5 million people, possibly including Marcus himself.

Here’s a quote from the book:

“You have the power to strip away many superfluous troubles located wholly in your judgment, and to possess a large room for yourself embracing in thought the whole cosmos, to consider everlasting time, to think of the rapid change in the parts of each thing, of how short it is from birth until dissolution, and how the void before birth and that after dissolution are equally infinite.” 

in order to cope with his anxiety, loss and illness, Aurelius would look to apply various stoic philosophies to get by. It goes without saying that this book doesn’t provide the answers to dealing with a pandemic but it does provide insight into how Aurelius used his experience and wisdom to endure hardships caused by the plague.

The Dichotomy of Control focuses on what can be controlled by us and what can’t be controlled by us. whatever happens to us, is never truly within our control but how we perceive it and react to, is within our control. 

You can listen to it, for free, at LibriVox (https://librivox.org/the-meditations-of-marcus-aurelius/)

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Trading Journal

Entry 7

Tesla - 07/01/2021 - 14:41PM Pre-market - $776 Hit $790 - 800. Return to $760 - 770

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Trading Journal

Entry 6

Admiral Stock to hit £40 some time this year

expecting £33 by Q4

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Gravity Engines

The other side of Black Holes 

"As a species we are born out of 4 billion years of fierce molecular evolution that leaves us eager to work and work and work. We do it to survive, and for far too many of us that survival is still not guaranteed. For others it is more a means to an end, a way to provision ourselves with the things that bring comfort, joy, and even some peace. Nonetheless, we should all consider taking just a moment now and then to stop and gaze skyward. As tiny as we are, our lives are tied intricately into an amazing and grand cosmos. This is our heritage, We should be proud and satisfied with our place in it, and never put aside our curiosity about it.” 

~ Caleb Scharf

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A Few Things I Learned Watching a Hedge Fund Manager Lose $4 Billion on One Trade

Maybe you also followed this story. Or maybe not. But basically a really big hedge fund manager, one of those guys who people quote and probably talk about at Harvard Business School, placed a super big bet on this company called Valeant.

Valeant is a pharmaceutical company trying to cure problems with skin and infectious diseases. They actually also own Bausch Lomb so that means they have a giant eye care business.

This hedge fund manager made a bet that Valeant would keep growing their business, diversifying, and acquiring. He once even called them the next “Berkshire Hathaway.”

This thesis turned out to be wrong. Like really wrong. The company crashed. People started to call Valeant out for jacking up the prices of their drugs. They also were apparently doing some dicey bookkeeping things. Just Google “Philidor Valeant scandal” if you want to learn more about that.

The end result looked like this:

So what did I learn from this story? Are there any interesting takeaways for you? I think so. And by writing this I hope I won’t make the same mistakes. Maybe now you won’t either. Here are a few things I learned from witnessing one of the worst trades ever:

Risk management is everything. No single investment or trade should ever be able to wipe you out. You want to play this game forever. In 2015, this hedge fund manager had $12 billion in assets under management. He poured $4 billion into Valeant. So he essentially risked a third of his clients money on a single outcome.

Don’t ever average down! This hedge fund manager did not cut his losses when the stock started to crash. Instead he averaged down. He bought more. Then he played the options market. Just cut your losses if it’s not working anymore. Get out. Paul Tudor Jones said this best:

Humility is everything. If you are going to make a trade like this, at least do it quietly. Don’t go on CNBC and tout it. Or promote it. When everyone knows about it on the way up, they’re also going to know about it on the way down. It might make things even worse. The media and people will turn on you for entertainment, clicks, and laughs.

Social media is your friend. There are some seriously smart people on social media. The Valeant ($VRX) stream on StockTwits is filled with conversations, charts, and debates at all times. Don’t ignore that. Or even the bloggers. A few investment writers totally nailed it. They’ve been writing about Valeant and its problems for years. To this day it’s free and open on their blogs.

It happens to everyone and it will happen to you. No one makes great investments 100% of the time. Everyone gets hit here and there. Even Warren Buffett admits to this. He wrote about it in his latest letter to shareholders. Like that one time:

“I made one particularly egregious error, acquiring Dexter Shoe for $434 million in 1993. Dexter’s value promptly went to zero. The story gets worse: I used stock for the purchase, giving the sellers 25,203 shares of Berkshire that at yearend 2016 were worth more than $6 billion.” — Warren Buffett

Narratives are fun, but you also need to see the data yourself. What’s really amazing is how this hedge fund manager lost a ton of money. His brand and skill is being questioned and criticized around the globe. But someone recently showed me something interesting. The following chart shows the price of Warren Buffett’s Berkshire Hathaway vs. this hedge fund manager’s company Pershing Square. Yes, by this metric he’s outperforming Buffett! As a spectator, it’s fun to get into big story lines and narratives. But always make sure you corroborate the data:

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Spook’s Journal

Entry 2 - Time 

What is your time worth? Surely, if you have a job, you can tell me what it’s worth. But outside of that, how much is your time worth?

How do you spend your time - do you waste it with people who have no hopes and dreams? People who constantly party? DO you hang around with people who live pay check to pay check?

Are you one of those people who picks up every call from friends and turn up to party?

They successful people and people with ambition and enthusiasm should avoid you. You and similar people are dream killers and suck the soul out of people.

Now that’s not to say that your shouldn’t enjoy life - of course you should. But you need to think 20 years in the future. If you’re 20 years old, i want you to imagine what you’ll end up like at the age of 40 because you did or didn’t value your time.

‘But what about 5 year plans?’. For people who lack motivation, 5 year plans are traps and illusions. You fall into this cycle of, i’ll start tomorrow and procrastination creeps in. You become comfortable, you become a couch potato. 

My friends and family have gotten to know that my time is expensive. Of course i’ll be there for emergencies and bad times and the good times, but they appreciate it more cause they are aware of what I've scarified to be there for them.

I don’t pick up on every call and i don’t respond straight away to unimportant messages.

You need to condition these people, especially if you want to be successful, that things will work on your time. And i’m not advising you be absolutely selfish but you learn to put yourself first from time to time.

Success demands sacrifice - it is the price that you need to pay.

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Trading Journal

Entry 5

Expecting XRP to break $0.65 next and then $0.70

4hr chart