The forex market is not only the world’s largest market, it’s also its most liquid. This means that there’s a lot of potential success in forex trading. But there’s also a lot of risk for loss on the flip side. All forex traders aspire to success and work hard to analyse markets, formulate trading strategies and execute profitable currency pair trading. Part of success in any industry or facet of life is diving into the stories and learning the lessons of the best and most successful. With that in mind we bring you the world’s best forex traders.
Andrew Krieger is amongst the most famous forex traders. After graduating from the Wharton School of Business, Krieger worked for the Saloman Brothers and the Bankers Trust in the late 80s. He scored some big results through rather risky and ruthless trading which prompted the raising of his trading limit from $50 million to $700 million.
During the Crash of 1987, there was a panic as supply for stocks far exceeded demand causing prices to freefall. Krieger, seizing the opportunity, searched for and found a smaller currency from a smaller country which was overvalued and prone to collapse. Using is newfound extensive purchasing power he shorted the New Zealand dollar at a leverage of 1:400. The result? The NZ dollar went down 5% after a few hours and Krieger ended up pulling in somewhere between $220 and $300 million on the deal for his company.
Michael Marcus is another extraordinary forex trader and one of the best in the world. He is reputed to have turned $30,000 into something around the order of $80 million within a few decades. Marcus graduated from John Hopkins and Clark University in 1969 and his career began with trading plywood futures and later freight derivatives.
He then joined Commodities Corporation. Trained by Ed Seykota while working as an analyst, Marcus developed his key money management skills during this time. In turn, Marcus would later help to train Bruce Kovner, who also became a renowned and successful trader. Marcus is particularly well known for having been one of the largest traders in German marks during the time that Ronald Reagan was the US President, having held positions of just shy of US$300 million in German marks.
Perhaps the most famous forex trader, George Soros has a reputation that precedes him and is often named as one of the best investors ever. His main fortune was made in 1992 during ‘Black Wednesday’ where he supposedly profited more than 1 billion pounds after having shorted his position in pound sterling. Soros’ analysis of the situation, based on a prediction of the rare combination of a high interest rate level from British banks and the unfavourable rate of Britain’s Exchange Rate Mechanism (meaning that the government would intervene if the pound dropped to a specific point), led him to short the pound accordingly.
In other words, what was clear was that due to the recession, higher interest rates would hurt the economy despite that being exactly what was required to maintain the value of the pound. The necessary interest rates were much lower than what they were as a result of the commitment to ERM, thus the value of the pound was maintained ‘artificially’. Noting all of this, Soros consolidated his holding by building a significant position short of the pound. Ultimately, when the ERM was abandoned and the pound’s value dived, Soros and his Quantum Fund netted billions of dollars.
Paul Tudor Jones is another all-time great forex trader who also made his wealth during the crash of 1987. Jones graduated from the University of Virginia and began his career as a trading floor clerk. Rather than attending Harvard Business School, Jones worked as a commodities trader in the New York Stock Exchange. Throughout the crashing of markets in October 1987, his newly formed company, Tudor Investment Corporation, managed to make a significant profit based on his short positions and Jones managed to triple his money. That year, his firm posted $100 million in earnings thanks to his anticipation of the crash that few others saw coming.
Bill Lipschutz worked for the Salomon Brothers throughout the 80s and was invited to join the Foreign Exchange Department and contribute to emerging strategy planning for currency trading. By 1985, Lipschutz was the principal trader and was bringing in $300 million a year for the company. When asked about his success and influence in the forex trading market Lipschutz has been known to repeatedly refer to forex trading as a ‘psychological’ profession and believes that perceptions within the markets can be just as influential as hard fundamentals. Additionally, a core trading strategy Lipschutz champions is the need to manage risk and work on strategies that take into account a higher volume of wrong trades over fewer right, but very profitable, trades.
Stanley Druckenmiller is a graduate of Bowdoin College and began his career as a trainee in the Pittsburgh National Bank. After just one year he became the head of the equity research group and later founded his own firm: Duquesne Capital Management. In 1988, George Soros hired Druckenmiller and he worked with Soros’ Quantum Fund for a number of years being heavily involved in the “breaking of the Bank of England” with Soros in 1992.
Independently, Druckenmiller has cemented his own legacy with many years of successive double-digit gains and has become regarded as sitting among the best day traders throughout the globe. Part of his trading philosophy is a “top down investment” approach where he holds a group of stocks short, a group long and leverages to trade currency and futures.
What does it take to become a top forex trader? There’s simply no single method, strategy or technique that can simply be replicated with the astonishing success of the best traders mentioned above.
But there is little doubt that market awareness, discipline, risk mitigation, courage, and a dedication to a well-informed and well-researched trading strategy all go a long way to success in foreign exchange trading. Learning from your mistakes and learning from the success of the best forex traders in the world will undoubtedly help you develop your trading plan and aid you in carving out a path forwards in the exciting arena of forex.
So what now? Why don’t you explore what forex trading is all about and how it works with Global Prime. After all, the GP team’s mission is to become the number 1 retail broker in the world for pricing and execution, so who better to partner with than the team that’s dedicated to trading better?