The Most Famous Forex Traders in History
Even the most famous forex traders started somewhere, and studying how the best of the best rose to the top may be the first step to emulating their victories. Here is what you should know about the top forex traders in history and what they credit for their success so you can join the ranks of the most successful day traders of all time.
After surviving Nazi occupation of his native Hungary, businessman George Soros moved to England, where he eventually worked in investment banking. After immigrating to the United States in 1956, he spent time at several firms in New York before founding his own hedge fund in 1970, Soros Fund Management, which later became the Quantum Fund.
In September 1992, Soros made 1 billion British pounds betting against the UK’s currency. This led to what is commonly known as “Black Wednesday,” the day the pound was forced out of the European Exchange Rate Mechanism. One piece of wisdom from George Soros is to not have fun while investing. “If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring,” he has said.
Often referred to as the “Sultan of Currencies,” Bill Lipschutz grew up in New York. He earned an MBA from Cornell’s Johnson School of Management. When he inherited $12,000 he began investing in his free time while studying markets and trading mechanisms. He managed to convert his $12,000 into a portfolio worth approximately $250,000, but then lost it all due to the erratic nature of the business. This prompted his interest in forex trading, leading him to become part of Salomon Brothers, making the company $300 million in a single year. One of Lipschutz’s key lessons is to pay attention to risk-to-reward ratio. For short-term trades, he advises looking for a 3-to-1 multiple of upside to downside. For more complicated trades with more risk, Lipschutz says, the ratio should be closer to 5 to 1 at a minimum.
Stanley Druckenmiller grew up in a middle-class suburban family in Philadelphia and began his financial career in 1977 as an oil analyst for Pittsburgh National Bank. After leaving PNB to create Duquesne Capital Management in 1981, he started working for George Soros, earning him over 30 percent return in the Quantum Fund.
Along with Soros, he is credited for the same deal that “broke the bank of England.” Druckenmiller is also known for his steady financial standing, with only five losing quarters out of 120. A word of advice from Druckenmiller: forget diversification. “I think diversification and all the stuff they’re teaching at business school today is probably the most misguided concept everywhere,” he said during a speech at the Lone Tree Club in North Palm Beach, Florida.
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