We all know that the number of successful Forex traders is quite low. In fact, there is about one profitable Forex trader for every ten people who trade Forex.Why would people trade currencies if most of them are unprofitable?
The reason is simple.
Because there are traders who are successful and everyone hopes to become such a trader one day.
Nowadays, there are many people who like to call themselves successful. Most of them are looking for ways to demonstrate significant returns over a short period of time. Naturally, this sounds great, but it’s also risky and dangerous.
This is why the traders who can really call themselves successful not only generate profits but also retain those profits and even multiply them.
Forex is a big market and it has many participants. Even though most of the volume is generated by the institutional clients, there are some very talented individuals who took the world of foreign exchange by storm.
In this article, we will give overview of the three most Forex successful traders, explain their backgrounds and the rationale behind their trades.
Best Forex Trader in the World
We probably don’t have to explain who George Soros is.
But just to remind you, we’re talking about the most successful trader in the world. He is also known as “the man who broke the Bank of England” because of a single $1 billion transaction he made.
Graduated from the London School of economics, the man surely knows how to multiply investment. He started his career with the Quantum Fund, founded in 1969. The company conducted many profitable operations under George’s supervision. His company’s profit equalled McDonald’s annual income on in 1996.
However, the most lucrative accomplishment of George’s career came from his Pound Sterling trade. He was declared as the one of the most successful traders in currency market in 1992 when he gained a net profit of $2 billion within the space of just a month.
Like many successful people whose secrets are sought after, George wrote many books. he revealed the nuances of his trading in the book about investment philosophy, Alchemy of Finance. It proposes his theory of so-called reflexivity that helped him to attain success.
This book is said to be read by almost every stock market person – and for good reason.
George Soros Secret of Success
The secret of George Soros’s success is not in the books he wrote. Basically, there is no theory that describes the working of the stock market.
His theory of reflexivity is really what makes him stand apart. He eloquently summed it up during his interview in John Train’s The new Money Monsters:
“My approach works not by making valid predictions, but by allowing me to correct false ones”.
Also, some traders who have worked with Soros can provide a more detailed and relevant understanding of the Soros investment strategy.
According to a former Soros Chief Investment Officer James Marquez, the strategy of Soros can be described as totally impulsive actions. Most of them are odd and against the rules: he sells at low rates and buys at high.
This only makes sense combined with his one-line mission statement: “to be able to come and fight another day”.
Another CIO of George Soros, Alan Raphael, disclosed that Soros never argues. When he is wrong, he just gets it out there and accepts that he’s wrong.
After that, it’s time for self-reflection.
Trading strategy of George Soros
Conventional traders don’t admit their bad investment decisions. They keep reminding themselves that it will eventually turn out to be a good one to keep in a long-term investment.
The question is, how the approach of Soros can be applied to individual trading and investment strategy? Just take a look at Soros’ vision of a practical strategy.
- Putting aside all hypotheses and theories that claim an understanding of markets work, being lucrative in the market has much more to do with apt wayouts and trade size.
- You have to determine a strategy that makes sense instead of relying on hypocritical successive decisions.
- Place your exits and position-sizing strategies before making a choice, no matter how appealing it is.
- And finally, no matter how bad it gets, keep yourself calm and rational.
Even when it’s laid out like that, Soros’ story reads like a fine book. If you are looking to learn from the best, certainly take a look at what Soros has to say about the market, trading and about life in general.
Soros is certainly leading the list of the most successful FX traders in the world, but let’s see who else is on the list of successful personalities.
Two of the most successful Forex traders
Even though Mr. Soros in undoubtedly a great Forex trader, let us take a look at the other two traders who made it to the list of top Forex traders. A thing that these traders have in common with Soros is that all of them actually weren’t just simple retail traders, but rather they were managing their own trading companies.
As such, we can see that the best Forex traders are not only smart people but also great managers. Their success comes from the fact that they are able to generate great ideas and make other people believe in these ideas.
Lipschutz attended Cornell University where he received a bachelor’s degree in fine arts as well as MBA in finance. During college, he became interested in financial trading after he inherited around 12 thousand dollars of stocks after his grandmother’s death.
He invested the inherited money in the stock market, turning the initial 12 thousand dollars into over 250 thousand. This victory was short lived, sadly, as he lost it all with one bad move accompanied by bad stocks.
He considered this unfortunate happening a learning experience and didn’t let it get him down.
While still in college, Lipschutz began working as an intern at Salomon Brothers. Soon after graduating and joining the company full-time, he became part of their foreign exchange department. The Forex markets skyrocketed at this time as well, and he ended up becoming head of the department.
He was making Salomon Brothers 300 million dollars a year by 1985. In 1989, he was promoted to Managing Director and Global Head of Foreign Exchange. His success only grew from there, as he became the CEO of and president of North Tower Group. He founded his own asset and management firm, Rowayton Capital Management, and was its president and CEO until 1995.
Bill Lipschitz has been regarded as one of the most successful traders.
John R. Taylor Jr.
After graduating from Princeton University, Taylor went on to become a political analyst for Chemical Bank. Just a year after working at the company, Taylor had a wonderful opportunity to gain experience and connections in the Forex business he would soon dominate. He became the bank’s forex analyst, which inspired him to become more deeply involved with forex trading.
He went on to build his own company in the industry, FX concepts. FX concepts is a currency management firm that has seen great success since its start. Taylor is also credited with being a pioneer in computer-aided forex trading.
The highly successful Forex trader is also the designer of the first ever computers made to assist multinational companies in Forex-related affairs. As if that wasn’t enough, Taylor co-founded Inspiration Biopharmaceuticals, Inc, has published many investment management journals and provides investment advising on a daily basis.
Are there more successful Forex traders?
Indeed, there is a large number of successful traders.
In general, the success of Forex traders is measured by how reliably can they generate extraordinary profit. This profit does not necessarily be calculated in billions or millions, too. If your skills allow you to regularly generate a few thousand USD per month through trading Forex, you would be a good fit in our list.
An important thing to keep in mind is that successful Forex trading will result in profits. When profits add up, they let you generate more opportunities from the market. In other words, success is not some point in your trading career, it is rather a journey of becoming a better trader than you used to be the day before.
And like with any journey, it begins with a single step.
This article was written by Nenad Kerkez from Admiral Markets.