You probably know by now that success on the Forex market is a result of hard work. Many new traders avoid going through the lengthy initial steps and end up with nothing. But as we have already established, this is not a post about failure. We came here to learn from the experiences of the most successful Forex traders. The following list focuses on people who made the large portion of their fortunes off currency and stocks trading, meaning that for the purposes of keeping this specific we are excluding financial gurus like Warren Buffet and Benjamin Graham, since their investment portfolios are far too wide. Also, it is important to point out, that we are not trying to list everyone who has ever gained any profit from trading, but rather the ones, who were, in our opinion, the most attention worthy from the learning perspective. Without any further ado, let’s meet the true pros of the Forex market.
George Soros
Born: August 12, 1930
Origin: Hungary
Net worth: 8.3 billion USD
Quote: “I’m only rich because I know when I’m wrong. I basically have survived by recognizing my mistakes”
George Soros is one of the most successful Forex traders in the world and he is widely recognized as a man who broke the bank of England. Mr. Soros had a rather traumatizing childhood, growing up as a Jewish boy during WWII in Hungary. Post war Soros moved to the UK, where he attended the London School of Economics and perhaps this was the point where the financial seed was planted in the young man’s head. The events that are worth noting were his first finance related job as a bank merchant in 1954, moving to New York and working as an arbitrage trader for F. M. Mayer, founding the Soros Fund Management in 1970, an investment management firm that went from a hedge fund to a family office. As you take a deeper look into the biography of George Soros, you will find many worthy of attention events. But the one that stands out the most is, of course, the 1992 pound short.
Soros is known for focusing on long term investments and was never seen implementing scalping or day trading strategies. So back in 1992 he was building a certain short position for several months up until September. Soros recognized the weak position of the United Kingdom in relation to the European Rate Exchange Mechanism and by September 16, a day known as the Black Wednesday, he sold short nearly $10 billion worth in pounds, profiting from the UK’s government losing position. Eventually, the government had to give in, which led them to withdrawing from the Exchange Mechanism and devaluing the national currency. George’s vision of the situation resulted in almost $1 billion worth of profit and earned him a place in history as the man who broke the bank of England.
Paul Tudor Jones
Born: September 28, 1954
Origin: the United States of America
Net worth: 5.1 billion USD
Quote: “Don’t be a hero. Don’t have an ego. Always question yourself and your ability. Don’t ever feel that you’re very good. The second you do, you are dead”
American born and raised Paul Jones was on his path to success from the very beginning. After graduating from the University of Virginia, Jones was introduced to trading with some help from his cousin. Through this connection young Paul was mentored in commodity trading by a well known cotton futures trader, Eli Tullis. Tullis fired Jones for partying too hard and sleeping on the job. Ironically, years later the previously irresponsible intern served as first a treasurer and then as a chairman of the board for the New York Cotton Exchange. The main takeaway from cotton trading was the importance of risk management. He once said: “If you have a losing position that is making you uncomfortable, the solution is very simple: get out, because you can always get back in”.
Starting from 1980, Jones had an eventful life in terms of financial operations as a founder of Tudor Investment Corporation. Perhaps, the most significant event of his professional journey was predicting the Black Monday - the day in 1987, when the Dow Jones Industrial Average index dropped 22.6% over the course of one day. This once again brings our attention to the importance of understanding the market, in order to be able to foresee the upcoming events and use them for your benefit. Until today Paul Jones remains one of the most influential investors and philanthropists and can also be considered one the most successful Forex traders after he bet against the Japanese Yen back in 2013 and closed with a nearly 20% return rate.
Bill Lipschutz
Born: January 1, 1956
Origin: the United States of America
Networth: unknown; known profit: over $300 million a year in 1985
Quote: “If most traders would learn to sit on their hands 50 percent of the time, they would make a lot more money”
Born in a small town on Long Island, Lipschutz attended one of the Ivy League’s finest - Cornell University and graduated with a Bachelor’s degree in fine arts and an MBA in finance. While still a student, Bill inherited $12 thousand worth of stocks from his grandmother and with some studying and careful planning managed to grow that amount into nearly $250 thousand. Unfortunately, due to one wrong decision Lipschutz did not get to keep the earned money as a part of his fortune. However, this inspired and motivated him even more to get to know the nature of the market and conquer it eventually.
In 1982 he became first an intern, and then a full time employee for Salomon Brothers, a former American investment bank that currently operates as Salomon Inc. under the commodity trading firm Phibro Corporation. Salomon Brothers was founded in 1910 and became one of the top Forex participants back in the day. Lipschutz was a part of the foreign exchange department and it is a known fact that by 1985 he was making $300 million a year for the company. In 1995 Lipschutz formed a Hathersage Capital Management with his former classmates from Cornell and serves as the Principal and Director of Portfolio Management up until this day. Our main takeaway from this particular biography is the significance of learning and perfecting your skills - Bill could’ve easily given up on the idea of trading back when he lost the $250k, however he did not and he is now at the very top of the game.
Bruce Kovner
Born: February 25, 1945
Origin: the United States of America
Net worth: 5.3 billion USD
Quote: “Fundamentalists who say they are not going to pay any attention to the charts are like a doctor who says he’s not going to take a patient’s temperature”
Bruce was born in Brooklyn into a family of a semi-professional football player and engineer and his wife. From the very beginning Kovner proved himself to be an achiever, by becoming a Merit Scholar, a student-body president of his high school, an accomplished basketball player and a pianist. Bruce attended Harvard, studying political economy and performing in a number of jobs and projects, including: participant in political campaigns, harpsichord player, writer and a cab driver. It was during the latter when Kovner first discovered commodity trading.
In 1977 Kovner made his first trade by investing $3 thousand off his credit card into a soybean futures contract. The deal went up and gained $40 thousand in value, however it also dropped to $23 thousand before the closure. It was that nerve-wracking experience that pointed out to Kovner that proper risk management is the foundation of trading success. This realization led him into becoming one of the top traders under Michael Marcus at Commodities Corporation. In January 2012 Kovner established CAM Capital, a company that now manages his investments, trades and business activities. The best outtake from the story of Bruce Kovner is his advice to new traders: “My experience with novice traders is that they trade three to five times too big. They are trading 5 to 10 percent risks on a trade when they should be taking 1 to 2 percent risks”.
Stanley Druckenmiller
Born: June 14, 1953
Origin: the United States of America
Net worth: 4.4 billion USD
Quote: “If you’re early on in your career and they give you a choice between a great mentor or a higher pay, take the mentor every time. It’s not even close. And don’t even think about leaving that mentor until your learning curve peaks”
Druckenmiller grew up in suburban Philadelphia and earned a Bachelor’s degree in English and economics from Bowdoin College, Maine. Fun fact: during the college years Stan opened a hot dog stand with Lawrence B. Lindsey, who later served on the team of President George W. Bush. Being not much of a man of science, Druckenmiller dropped out of getting his Ph. D from the university of Michigan to accept a job offer from Pittsburgh National Bank, where he became an oil analyst. Just one year later he became a head of the equity research group of the bank. In 1981 Stanley opened his own firm - Duquesne Capital Management. Later on he was splitting his attention between his own company and Dreyfus Fund, where he later became the head.
In 1988 Druckenmiller was hired by George Soros and took part in the event referred to as Black Wednesday. After leaving Soros in 2000, Stanley focused completely on the Duquesne Capital Management and delivered exceptional results for their clients - the company is known for posting an average 30 percent yearly return with no money losing years. In 2010 Druckenmiller retired, noting that it was difficult to operate with such large amounts of money and still making big profits. He is now recognized as a philanthropist and was even named the most charitable man in America, after donating $705 million to various causes and projects.
Richard Dennis
Born: January 9, 1949
Origin: the United States of America
Net worth: unknown; recognized for turning $1,600 into $200,000,000
Quote: “Trading decisions should be made as unemotionally as possible”
Richard Dennis is often called a Market Wizard or a Prince of the Pit and is largely known for two things: turning $1.6 thousand into $200 million and designing a virtually foolproof turtle trading learning system. His financial career began when he was just 17 years old as an order runner on the trading floor of the Chicago Mercantile Exchange. Just after a few years Dennis opened his own account at the MidAmerica Commodity Exchange and since he was not yet 21, hired his dad to perform the trades in the pit. Richard’s education was far from finance-related, he earned a bachelor’s degree in philosophy from DePaul University. But that did not stop him from borrowing $1600 from family and growing it into nearly $500,000 in just a few years.
Dennis is known for his turtle-like trading methods: when everyone around focused on scalping, he held some positions for several days, sometimes pyramiding his trades. Richard believed that successful trading is a skill and to prove that point he gathered several groups of financial enthusiasts, who he taught to achieve significant profit by following his exact instructions. The “turtles”, name taken after actual turtle farms Dennis observed in Singapore, reportedly made over $175 million in about five years. In a nutshell the trading method they followed was focusing around technical analysis, rather than fundamental one, staying flexible in terms of position parameters and planning the exits just as meticulously as the entries.
Now let’s get back from history and into reality. If you ever wonder what is the percentage of successful Forex traders, you will most often come across the following figures: roughly 90% of all traders are going to fail. Which leaves us with 10% of the successful currency traders. This does not seem like much. However, if you translate these numbers into the amount of individual traders who make up the 10 percent you will get nearly 1 million people. This way the number seems more approachable and we can move on to the actual characteristics of the person who is most likely to become a part of the positive statistics.
From the stories above we have observed the three main themes: patience, persistence and knowledge. It is also important to point out the importance of risk control, that was noted by every single successful trader. Let’s extend these qualities by adding a few things that did not apply to the trading experiences of the previously mentioned people, as they have mostly operated in the past century. Here comes the combination of guru wisdom and the modern awareness in the 5 qualities of successful online Forex traders.
Top 5 Qualities Of Successful Online Forex Traders
The right mindset. Not every trade will turn out in your favor. And that is natural. Your job is to accept it as a fact and learn to treat the setbacks as educational experiences and opportunities for development. This applies to both market pros and the traders who just joined yesterday: take note of each action and reflect on it frequently to become a better version of yourself. Also take a good look at your very human reactions and behaviours - most of us act irrationally following the instinct for greed, dominance and fear as well. And these are the exact qualities that will prevent any victories from happening. At the end of the day it is the lack of self control that leads so many market participants to give up. So, focus on keeping your impulses under surveillance and practice walking away from stressful situations. For example, when the market becomes too volatile to handle - take a break and wait for things to cool off. Another important part of the successful trader’s mindset is the right amount of confidence. This means that you should feel certain that you definitely have a chance of turning most situations in your favor, but also understanding that a change is not a guarantee. Doubting your own decisions and accepting the fact that you might be wrong are the skills of the truly professional Forex traders.
Paying proper respect to studying. How long does it take to become a successful forex trader? There is no single answer, but what we know for sure is - it takes a good amount of time. Get to know the market and the way it works, look into all the factors affecting the movement of the charts and find a trusted source of new information. Being always prepared isn’t just for scouts, it is a good philosophy to go by for pretty much all areas of work and life. Thankfully, getting the right information nowadays is easier than ever. Take a learning course, offered by your broker or follow an educational blog by a successful trader - whatever works for you personally. And make sure to test out the newly obtained knowledge prior to fully implementing it, to ensure the best possible outcome.
Mastering risk management techniques. Just as there is no trading without setbacks, there is also no trading without risk. Risk is both inevitable and crucial, because if you avoid taking risks it will mean that you are avoiding the trading altogether as well. The right approach to risk is to minimize it by using one of the established techniques or inventing your very own. For example you can limit the time you spend trading by stopping the process when a certain number is hit, or you can experiment with the risk to reward ratio and find what works best for you personally. Your risk management approach will also largely depend on your trading strategy and what’s more, you should always feel free to adjust it whenever something seems off.
Gathering the right tools. Twenty years ago the word trader defined a person, screaming from the top of their lungs in a room, full of other screaming people. Today it is anyone from a corporate worker in a crowded office to a stay at home mom in the comfort of her own house. This proves that the technical side of Forex trading has grown so much that we can now consider trading whenever and wherever we wish to. But the accessibility itself won’t always guarantee the quality. So as you look for software tools you are planning to use on your journey - pay attention to things like usability, effectiveness, popularity and, of course, reasonable pricing. Good news is that most brokers are willing to give a lot of necessary software and assistance tools as a part of their agreement with the clients. For traders this means getting access to sophisticated trading platforms as well as trustworthy analysis sources all in one place and in most cases - for free.
Encouraging creativity. Last but not least, the traders, who manage to stand out from the crowd with the amount of their success, are usually the ones who keep practicing thinking outside the box. Obviously, you will most likely not be able to create your own tricks and methods in the very beginning, however, the more you understand the market and the longer you trade - the better is the chance to see a big picture and work out your own way of dealing with it. The best way to approach this is by letting yourself experiment and run wild for a bit. This way you can see what works and what doesn’t and create your own action plans for dealing with a variety of situations. However, experimenting under the live market conditions can be risky and stressful, which brings us to the next segment - practicing Forex trading in a free demo account.
