The world of forex trading has been a fascinating domain that continues to attract new players. The thrill of trading in currencies and the promise of profits have been a staple in the world of forex as much as it has been in any other business arena. Naturally, both seasoned professionals and new entrants into the industry hold successful forex traders in high esteem.
So who were the most successful forex traders ever? What were their stories like and what made them tick? We take a look at a few of the legends in the world of forex trading.
No list of the most successful forex traders in history can begin with any name other than George Soros. Arguably the most famous and accomplished name in the world of forex trading, Soros was born in Hungary in 1930 and later moved to the United Kingdom and studied at the London School of Economics.
He rose from humble jobs that included stints as a waiter and a railway porter before he heard his true calling in the world of forex trading. With a sharp mind and sheer hardwork, Soros worked his way as a currency trader and establishing his own hedge fund, Soros Fund Management (later renamed the Quantum Fund), in New York.
Soros wrote history when his short position on the British pound in 1992 earned him a profit of a billion dollars. The impact forced the UK to withdraw the GBP from the European Exchange Rate Mechanism.
He is revered today as the greatest ever in forex trading and has a net wealth of over $25 billion. An active philanthropist and an author, Soros is every aspiring and practising forex trader’s inspiration and role model.
A mentee of George Soros at Quantum Fund, Stanley Druckenmiller played a supporting role in the 1992 Black Wednesday incident which saw the British pound take a big beating and the Bank of England’s near collapse. The decade long stint with Soros sharpened his skills and established a reputation for Druckenmiller as a formidable forex trader.
He cemented his reputation further as a star portfolio manager at his own company, Duquesne Capital that consistently returned over 20% year on year.
The 2008 market crisis took a toll on the hedge fund company resulting in Duquesne Capital closing operations in 2010. The billions of dollars that he successfully managed there was a testament to his pedigree as someone who honed his skills with a titan like Soros.
In his acclaimed book, “The New Market Wizards”, Druckenmiller talks of his trading strategy and philosophy that focuses on capitalising on opportunities where the going is good and exercising caution in difficult situations. This sense of timing and his instinct for safeguarding his capital have been his hallmarks.
Called the “Sultan of Currencies”, Bill Lipschutz is an unlikely candidate to be one of the greatest forex traders of his times.
Lipschutz scripted the story of his trading career with ups and downs, highs and lows. His beginning itself was anything but finance, having dabbled with mathematics and even fine arts. ‘Rags to riches’ is the phrase that best epitomises his chequered career in forex trading.
Lipschutz started with a meagre capital of $12000 that he inherited in the form of stocks. He used that to create a portfolio worth $250,000. In a series of wrong investment decisions, he saw it all erode. He then became serious about learning all he could about risk management by completing business school.
Joining Solomon Brothers marked a turning point in his career where he joined the forex group and soon was a key player there. That marked his arrival in the league of the top forex traders when he started bringing in $300 million year on year with his trading brilliance. Right at the peak of his career, he made a rare move of stepping away from trading.
Five years later, in 1995, Lipschutz later co-founded Hathersage Capital Management that specialised in the trading of G10 currencies. His tenacity, timing and focus made him a success story among forex traders.
Paul Tudor Jones
One of the wealthiest traders and later the NYSE Chairman, Paul Tudor Jones set foot on the trading floor as a clerk but was to scale heights that only the cream of forex traders have managed to achieve. One of the few success stories to emerge from the 1987 market crash, Tudor Jones had chosen to skip an academic stint at Harvard Business School to pursue a career in commodity trading.
After founding his trading firm, Tudor Investment Corporation, Tudor Jones drew on his understanding of the forex market and the ability to take some daring short positions. When he called the market crash of Black Monday in 1987, he went on to make a remarkable $100 million.
A name that can be taken alongside stalwarts like Soros is Andrew Krieger who is considered to be arguably the most aggressive trader ever. His credentials were impressive, to begin with. A Wharton graduate and with successful stints at top names like Bankers Trust and Salomon Brothers, besides working alongside George Soros, Krieger is much more than reputation.
The New Zealand Dollar has a special connection with Krieger. He took to the currency during a time when it was hardly one of the more prominent ones being traded. Following the 1987 market crash, the Bankers Trust trader bucked the market trend around Black Monday to make a whopping $300 million profit for his company by taking a massive short position.
Krieger’s research and conviction told him that the Kiwi Dollar was overvalued and took positions so large that the currency fell by almost 5% triggering panic in the New Zealand government. He used leverage of nearly 400:1 playing with options and derivatives.
Andrew Krieger left Bankers Trust later to join George Soros to continue his trailblazing trading there.
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