When learning to trade it can really help to know that other traders have been successful and how they did it.
It can be inspiring to see how they achieved such huge success and that it is possible.
In this post we look at some of the most successful Forex traders in history, their trading stories and how some of them went from rags to riches in quick time.
Successful Forex Traders Stories
Whilst all of the traders discussed in this post are now widely famous and well known, it is Bill Lipschutz that has possibly the best story.
Today he manages a massively successful Forex trading firm, but the beginnings were far from where he would end up.
Bill Lipschutz had no background in economics or trading the markets and he taught himself.
Whilst attending university at Cornell in the 1970s Lipschutz managed to turn $12,000 into hundreds of thousands of dollars.
He would go onto lose all of this in one bad trading decision that would ultimately define and help him become the trader that he did.
By 1985 Bill Lipschutz had earned $300 million dollars for Solomon Brothers who he was working for at the time before leaving in 1990 to co-found Hathersage Capital Management.
One of Bill Lipschutz most famous quotes is;
“If most traders would learn to sit on their hands 50 per cent of the time, they would make a lot more money.”
We have discussed Richard Dennis before in a previous post discussing how he trained a group of non-professional traders into the ‘Turtles’ who then went onto make $100 million dollars, showing how anybody can learn to trade.
Richard Dennis was coined with the nickname the “Prince of the Pit”.
Dennis began his trading career trading commodities when he was only 17 years old as a floor order runner at the CME (Chicago Mercantile Exchange). You needed to be 21 to place trades and so he had his father place his trades for him.
After borrowing $1,600 from his family, he used $1,200 to buy his way into the pit and the other $400 to begin trading.
Using mini contracts, he began to trade with his own account at the Mid America Commodity Exchange. By 1973, Richard Dennis had earned $100,000 in profit.
1974 was a huge year for Dennis as he capitalized on a runway soybean market to make $500,000 in profits. By the end of 1974 he had become a millionaire.
Dennis is reported to have made $200 million in 10 years with the initial $1,600 money he borrowed.
Richard Dennis quote on losing small and winning big;
“You have to minimize your losses and try to preserve capital for those very few instances where you can make a lot in a very short period of time. What you can’t afford to do is throw away your capital on sub-optimal trades.”
One of the absolute titans of the trading game is George Soros.
George Soros is one of the richest people alive and is most famous for being named ‘the man who broke the bank of England’ after an incredible trade he made.
In 1992 during a period when the UK Government was devaluing the Pound, Soros made a trade with borrowed money to sell billions of pounds. After the devaluation, he bought back huge amounts of British Pounds and made almost a billion dollars profit.
Soros has an estimated net-worth of $24 billion dollars and has been generating significant trading returns for many years through his flagship the Quantum Fund.
Whilst his tactics and trading methods can often generate animosity, he has spent decades at the top of his game and is often listed as one of the best money managers of all time.
Soros has a trading methodology of making large and highly leveraged trades on the direction of particular markets including currencies, stocks and commodities.
George Soros believes that traders and those participating in the markets have a direct influence on price. It is these influences and trader behaviors that lead to the markets booms and eventual busts.
George Soros quote on the markets;
“Once we realize that imperfect understanding is the human condition there is no shame in being wrong, only in failing to correct our mistakes.”
Ed Seykota is a very interesting trader and different from the others in this post in that he uses electronic systems.
In fact, Seykota was one of the first to begin trialing, testing and then successfully using such systems back in the 1970s.
Ed Seykota first began testing with his trading system at the brokerage house he was working at which used basic computers and punch cards.
After testing and working on these systems, he soon went out on his own to manage client funds using his electronic systems.
Seykota was featured in the Market Wizards book with the author Jack Schwager saying “his achievements must certainly rank him as one of the best traders of our time”.
Ed Seykota quote on handling losses;
“If you can’t take a small loss, sooner or later you will take the mother of all losses.”
Conclusion on Successful Forex Traders
Four hugely successful and widely known traders, but all very different.
Where Richard Dennis is a trend trader looking to catch long running winning trades, Soros is making large and highly leveraged trades. At the other end Ed Seykota is using electronic systems to refine and master trading.
Whilst they do things very differently with different strategies, they have all had an incredible amount of success trading the markets.