Every industry has a front-runner—someone who leads the way in their field. The foreign exchange market is no different. A number of traders are well-known around the world for their forex trading skills. Who are the top forex traders to ever grace the forex market with their trading skills? Here, we want to narrow that list down to five.
1. George Soros
When searching for the best forex brokers, George Soros is the one to beat. He co-founded a company called Quantum Fund and is known in the forex circle for ‘breaking’ the bank of England. He is infamous for the short position he took against Britain’s pound currency in 1992. His winnings led to something we now know as Black Wednesday, which was the 16th of September. His foresight netted him over one billion pounds in personal profit. Soros was a disciplined trader. He went against the crowd in that manner. It shows that quantity is less important than quality.
Let’s learn a little bit more about his go-to trading strategy.
What trading strategy does George Soros Use
George Soros uses the Global Macro Trading Strategy. To some, his way of doing things is the best and most successful method when trading forex. His strategies are so good; they even work when trading some stocks and bonds. You may know this system by another name – fundamentals to trade.
The main purpose of this system is to get a comprehensive picture of the world’s economy. To be successful, traders must pay attention to:
- important events
- politics.
- Keeping an eye on economic data goes without saying.
Each of these factors listed above affects the value of currencies worldwide. George Soros recognized these factors and exploited them.
2. Stan Druckenmiller
It is not surprising that Stan Druckenmiller is the number on our list of forex trading greats. He was a trader for the master himself, the man who broke the bank of England, George Soros. He was also a part of the bet that went against Britain’s pound way back in 1992. Druckenmiller also served Soros’s Quantum Fund for over twenty years. He started his own fund – Duquesne Fund – which returns 20% and more every year when he left.
It should also come as no surprise that his mentor (George Soros) heavily influenced Druckenmiller’s trading technique. You can see the resemblance in the investment method he used.
He took the top-down approach. When using this method, you must combine short positions and long positions in a variety of assets like those listed below. There were more.
- stocks
- bonds
- currencies
- Futures
He based his investment choices on his personal forecasts of market trends over a specific time span. He also used macroeconomic climate to guide his trading decisions.
3. Bill Lipschutz
Bill Lipschutz is number three on our list because of his pauper to prince story. But that’s not all. He is also well known for turning twelve thousand dollars to two hundred and fifty thousand dollars and then losing it all on a bad investment. Why is he here then?
Bill’s story doesn’t end there. He recognized his mistake, which is advice that men like George Soros take for themselves. He went back to school, got a job in the foreign exchange market, and gained a lot more experience. Learning from his mistake allowed him to earn Solomon Brothers three hundred million dollars for each year he worked there.
Following that, he founded his own Management company (Hathersage Capital). His company has since grown to join the list of top successful multi-asset management firms in the world.
Bill Lipschutz trading strategy
Bill Lipschutz believes that investors should focus on risk-reward ratios. They should look for positions where they can earn a return of three dollars on a one-dollar risk. Investors must also learn the difference between a good trade and a losing one. They should pay attention to the following.
- trade timing
- stop-loss take profit set
- trade sizes.
4. Bruce Kovner
Fourth on our list is Bruce Kovner. That’s because he was no wonder-baby. The first time he traded, he was thirty years old. He had to borrow money from his credit card to make his first investment. But the risk he took earned him twenty-three thousand dollars in profit.
The transaction was not without its shortcomings as he could have closed at forty thousand. But according to Kovner, that initial trade taught him a really valuable lesson. He learned why risk management is important.
kovner lost a lot of his own trading. But to him, there is nothing wrong with making a mistake on the forex market as long as you are willing to learn from it.
Since his early days as a trader, his trading strategy has become bold and brave. He is now worth about 5.5 billion dollars.
What trading strategy does Bruce Kovner use
There are many, many strategies and rules involved in working the foreign exchange market. Each one has its own merit, I’m sure. But Kovner, like the other mention-worthy traders on our list, found what works for him.
Here’s a breakdown of what he has to say to newbies in the field.
Try not to get in a situation where you could lose a large sum of money, and not have any idea why. Risk management is the first and most essential rule traders should grasp.
His second piece of trading advice is under-trading. No matter what you believe, your position should be, cut it by half, at least.
After thirty years working in the forex market, Kovner retired. But, the company he started still uses Kovner’s ways of doing things.
5. Paul Tudor Jones
Paul Tudor Jones is one of the greats. We can go as far as comparing him to George Soros. But, it’s not only the profits he made that make him such a remarkable trader. It is also his longevity that puts him on our list of best and most famous forex traders.
Paul Tudor Jones has been one of the top traders for a very long time. Being so long in the game has given him the opportunity to fine-tune and perfect his strategy. That’s why he has such extreme success and is now worth 4.7 billion dollars. He learned how always to protect his money.
What is Paul Tudor Jones’s trading strategy
Simply put, Paul Tudor Jones is a swing trader. He approached currency trade by the tops and bottoms on the market. By doing so, he made quick but low-risk profits. Followers of long trends have difficulty mastering the methods of Mr. Tudor.
Who is the richest forex trader in the world
We have not included several other mentionable traders in our list. People like Michael Marcus who mentored Bruce Kevnor, who did make out list of people who are the best forex traders. As great as they all are, there can only be one greatest and one who is the richest.
What it all boils down to, I suppose, is net worth. Who is the richest forex trader in the world?
It is none other than the man named for breaking the Bank of England, George Soros. He now has an estimated net worth of eight billion dollars, which is higher than any other forex trader in the world.
What it takes to be a successful trader
There is no DIY manual to become great at trading fx. But, a forex trader can use several measures to help them with their success. Here are some of the things that work.
1. Knowledge
Learning how to trade is an essential part of becoming a successful trader. But it is often overlooked. Before conducting trade with a live account, new traders should try to gain some knowledge of how the foreign exchange market works.
A lot of online forex brokers offer test accounts and virtual cash you can use to practice. Running a dummy account will give you insight into how the market works.
2. Patience
Building your portfolio as a trader will take time. The time it takes to beef up your portfolio requires patience. To become the type of trader George Soros is, you must be willing to execute your trading strategy with patience over a long period of time.
3. Risk Management
We’ve already mentioned the importance of risk management. Bruce Kovner stressed the importance of managing risks because it is a critical part of forex trade. But it does not only involve setting up a stop/loss at a fixed number of pips outside of the entry cost. The trader has to understand how world financial markets are linked. Risk management takes a dynamic and active approach. A lot of forex brokers have a set-and-forget approach. But, that is the reason a high percentage of people who trade with them lose money.
4. Willingness to work against the grain
There are many successful traders around the world, but they are the minority. They represent a small part of the vast number of forex traders worldwide. Those who did make it to the top of our best and most famous forex traders were willing to make the less popular decisions. They stuck to their vision of where a currency pair would move. Being decisive was essential to their success.
How can you become a successful trader
We have already mentioned the strategies used by the greatest of the great forex traders worldwide. Even if they do not make all their secrets known, they have given us great insight into how to go about trading.
Making your way to the top of the best traders list is impossible. But to gain profit every month trading currencies, you must first create a forex strategy that works for you.
Let’s take a look at what those strategies might be.
1. Breakout Strategy
This trading strategy tries to identify new or developing trends. It tries to find price breakouts. What does that mean?
Our initial technique is to determine when a trend is likely to emerge. It looks for price peaks and valleys. Markets often bounce between support and resistance bands. In a forex trade, this is what we call consolidation. A breakout occurs every time the market moves beyond the confines of that market’s consolidation to a new high or low level.
2. Crossover of the moving average
This forex trade technique uses something called a simple moving average. It is a price indication that finds a foothold on older or previous price data. It moves at slower rates than prices on the market changes. The simple moving average can be calculated over different time periods. The more time you allow before calculating the average, the slower the simple moving average moves.
3. Carry trade
Carry trade is a critical strategy in the forex market. Professional traders around the world use it, so it is not exactly a beginner’s strategy. But it is a simple technique that is easy to understand. Using it is just as simple.
Carry trade aims to profit on the yield differential existing between currency pairs.
Conclusion
Scores of traders join the foreign exchange market every day because it’s easy to do so. Social trading has grown in popularity because we live in the information age. But this trend adds to the losses most traders experience. Going in the same direction the crowd is heading may lead to a build-up of losing trading accounts.
The top forex traders give snippets of advice to others trading on the market. Do they reveal all their trade secrets? No, they don’t. That is why traders should go into this market with a mind to learn and grow and develop a system that works for them.
If you hope to make it onto our list of top forex traders, our advice is, find a strategy that can work for you. Remember, trading on the forex market is not an exact science. It may take some time and some doing. You may also have to take a few hits along the way. Take each loss as a chance to learn and keep at it.
If you are just getting your feet wet on the forex market, here’s my advice to you. Get as much information and experience as you can before making any investments. Find a trading platform that allows you to practice using what is called a dummy account. You can trade with virtual cash before using actual money.
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