To become the most successful Forex trader, you will need to get into the mindset of one or more of the most successful Forex traders. Although success itself is not exactly a skill that can be practiced, there are some tactics and characteristics that can help achieve it better. Today we explore how to become one of most successful Forex traders in the world.
How Do I Become More Successful at Trading?
If you are already a currency trader, you might be wondering: how do I become more successful and profitable? There are actually several solutions out there.
For starters, you will need to make sure that you know exactly what you are doing. A lot of Forex traders get into currency exchange on bare enthusiasm. As a result: rash decisions, faulty analysis and countless setbacks.
Every professional trader will tell you that knowledge is guarantee of success. In the very beginning everything will seem confusing and hard to grasp. Then it slowly gets easier, as you continue trading and mastering one skill after another.
This, however, doesn’t mean that you should completely close your mind to any new information. The Forex market never stops, there is something new happening nearly every day. Keeping your eyes open at all times is probably the smartest thing to do.
Then you will have to focus on practicing patience. It is true that there are hundreds of opportunities appearing at the market each minute. But it is also true that it is not humanly possible to seize each one of them.
The most successful traders Forex, or any other market, know that in some cases so-called sitting on your hands can be more profitable than actually trading. An ability to observe and instantly analyze everything that happens before you is a valuable practice for anyone who wants to make foreign exchange their primary source of income.
Last but not least, the most successful Forex traders are masters of risk management. Risk is an inevitable part of trading. And professional traders know that the best way to approach risk is to respectfully acknowledge it and find ways to deal with it correctly. Avoiding risk altogether will mean avoiding trading, and that’s clearly not what we are looking for.
Now, let’s take a few moments looking at the trading careers of some of the most successful Forex traders around the world.
When we want to learn cooking, we seek advice from the best chiefs out there. If you want to become an artist — you go through hundreds of masterpieces from all around the world. Following this logic, where do we find inspiration to become the most successful Forex trader? That’s right, we learn about those who are already successful.
Below we’ve listed ten of the most successful Forex traders with brief descriptions of their trading careers. You can use this info as a source of your inspiration or even as a foundation for your trading strategy. Without further ado, meet the giants of the foreign exchange market:
- George Soros
At this point George Soros is far beyond being just the most successful Forex trader. He is actually more of a legend. Known as a man who broke the bank of England, Soros lived a rather challenging life.
The main lesson we can extract from George’s experience is properly reflecting on every mistake you make. “I am only rich because I know when I’m wrong,” Soros once said. Additionally, traders who are looking to adopt the similar philosophy of achieving trading success, should consider long term investments above short term trading, just as George Soros did.
- Paul Tudor Jones
Paul Jones lived a rather eventful life. He went from being fired from his position as cotton futures trader to becoming chairman and treasurer for the New York Cotton Exchange. Quite a leap, isn’t it?
Paul’s career started peaking when he predicted the Black Monday back in 1987. That day the Dow Jones index dropped nearly 23%. Correctly predicting the market’s next move is not a gift, it is a skill that Paul Jones has successfully mastered.
Jones teaches us to always question your confidence. “Don’t ever feel that you are very good,” he says. According to Jones, taming their ego is, perhaps, the hardest thing any trader will ever have to do.
- Andrew Krieger
Another great example of just how significant market analysis skills can be is Andrew Krieger’s experience of short selling NZD back in 1987. While Paul Jones focused his attention on stocks, Krieger noticed that the New Zealand Dollar was overvalued.
Krieger’s following actions of leveraging his capital 400:1 brought 300 million dollars to his employer, Bankers Trust. “The end of the world is just another opportunity”, said Krieger, showing his followers that absolutely any scenario can be turned around to be profitable.
- Bruce Kovner
Kovner’s trading career was far less steady from Krieger’s or Soros’s. His first successful investment into soybean futures fell as rapidly as it rose. That chart’s hiccup taught Bruce two things: acknowledge your risk and don’t disregard the importance of market analysis.
Kovner can be rightfully called one of the most successful Forex traders with his up-to-date net worth being around $5.3 billion. His main lesson to all novice traders is to pay equal attention to both technical and fundamental analysis and always aim to minimize the risks.
- Bill Lipschutz
Just like Kovner, Bill Lipschutz quickly lost his very first gain from investing. Growing $12 thousand into $250 thousand and then losing it altogether, inspired Lipschutz to learn every trick in the book to successfully conquer the market. And he did.
Starting as an intern at Salomon Brothers and growing all the way to forming his very own capital management firms, Lipschutz is one of the most successful Forex traders, who preaches inaction over rapid movement. One of his famous quotes is: “If most traders would learn to sit on their hands 50 percent of the time, they would make a lot more money.”
- Urs Schwarzenbach
Perhaps the least famous name among the most successful traders Forex, is Urs Schwarzenbach. But his lack of popularity has very little to do with how successful Urs is.
Unlike other traders in our list, Schwarzenbach focused mostly on foreign currency trading. What’s more, Schwarzenbach was an individual trader and made his first million using his own money.
Until this day, Urs Schwarzenbach prefers to remain in the shadows and trade his company’s funds. He is also recognized as a higher risk taker, compared to most companies who profit off Forex. Schwarzenbach’s risk management techniques can be described with one of his own quotes: “One cannot just think about new ways of generating heat — it is important to consider possible reductions as well. "
- Stanley Druckenmiller
The importance of learning is once again emphasized by Stanley Druckenmiller, who said: “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 worked under George Soros for a long time and participated in the famous Black Wednesday events. After leaving Soros, Stanley invested all his time into Duquesne Capital Management and became highly popular as he posted an average 30% yearly return.
When he retired, Druckenmiller mentioned that it was becoming more and more challenging to successfully operate with such large amounts. This shows us that even the most successful Forex traders have their own boundaries of making profits, mostly because they know all too well that nobody can make all the money in the world.
- Joe Lewis
Joe Lewis started as a real dark horse of all now famous Forex traders. He quit school at 15 to help his father with a small business. Lewis then managed to grow his father’s firm and sell it for a rewarding profit.
The gain from that business sale was then used for private trading from the Bahamas, where taxes are very low. Lewis was eventually powerful enough to trade alongside with Soros, making visible profits from going against GBP and short selling Mexican Peso.
- Michael Marcus
Not like anyone on this list, Marcus quit Forex trading altogether after reaching the tremendous heights. Michael Marcus grew $30 thousand into $80 million over the course of twenty years, which made him one of the most successful Forex traders.
Marcus realized, however, that trading with such amounts is very demanding. Which is absolutely true: the more successful a trader becomes, the more time and effort is required. Our main takeaway from the way Michael Marcus was trading is to closely watch the Central Banks and their decision-making process as well as to know when to stop.
- Michael Steinhardt
Closing our list is another legendary trader, Michael Steinhardt. Steinhardt managed to hold a record of a 24% compound growth for nearly 28 years. He retired, saying that there has got to be more to life than making rich people richer. However, just a few years later Steinhardt got back in the game.
According to Michael Steinhardt, a good trader has to be unable to accept things at their face value, always feel unsettled and have humility. Widely known for his philanthropic causes, Steinhardt is one of the most successful Forex readers with net worth steadily fixed around $1.1 billion.
As you can see at this point, there are many roads leading to success. Some are more challenging than others. But there is one common thing for all these paths: in order to become truly successful, you have to first define success.
We all have different images of a successful person in mind. From large capitals to scientific or personal accomplishments: it’s all very subjective.
Ask yourself: how much money do I need to make to call myself the most successful Forex trader? You have to keep the exact number in mind to be able to achieve your goals.
A lot in trading is based on your preferences and expectations, including strategies, amount of time invested in the process, risk managing techniques and so on.
But it is also fair to say that despite all the differences there are some characteristics that can be considered universal. Just before we wrap up, let’s summarize the few things all successful Forex traders have in common.
What do the Best Forex Traders Have in Common?
First, someone who aims to become a profitable Forex trader has to get into the right mindset. Accept the fact that currency trading will not always be easy, there are going to be both victories and failures, and, most importantly: you will have to commit to continuous learning.
To help yourself by limiting the area of research, decide on what kind of trader you are going to be early on. Start by mastering just a couple of currency pairs and study everything there is about them. Gradually expand your portfolio overtime, but always make sure to get to know each new instrument in the tiniest detail.
Next, focus on finding the most successful Forex trading system for yourself. Trading strategies by definition are not universal. And although finding the right approach is a time and energy consuming process, it absolutely pays off.
Consider trying out various trading styles and different methods within them. See what feels more natural to you and where you seem to have more success. No matter how profitable a certain strategy is in theory, you will never know whether it is applicable to your case, if you don’t give it a try.
Don’t seem to have any luck finding the right trading method? Consider inventing your very own most successful Forex trading system. Creating strategies is a relatively interesting process, as you get a chance to experiment with bits and pieces of knowledge you already have and discover new things along the way.
Just one thing you need to keep in mind, while working out your unique trading system is that it has to be done in the safest way possible. Meaning, that your experimentation should not have any harming effect on your account balance, whenever possible. One of the best solutions to attempt creating a trading strategy is doing it in the demo mode, a simulated trading platform experience that does not require any investments.
Finally, pay serious attention to your risk management techniques. As we already established, risk-free trading is only possible when you are not trading at all. This means that you have to work out a smart way of dealing with risk taking and ensure that you are taking the correct steps towards optimizing your trading process.
We don’t have the right formula for becoming the most successful Forex trader yet. On one hand it gives us a whole load of uncertainty. But on the other it simply means that nearly everyone has a chance to become successful.
Keep learning and practicing, accept your mistakes and use them to move forward. Who knows, maybe you are going to place your name on the list of the most successful Forex traders one day.