Most currency traders avoid the limelight, quietly building profits, but a select few have risen to international stardom. These well-known players have broken the mold, posting incredible results over long careers. They’re people of influence who have had a profound impact on the industry.
These individuals offer a guiding light to forex traders at the start of their career, as well as journeymen looking to improve their bottom-line results. (Read more on the topic, here: Five Biggest Obstacles Facing First-Year Traders.) These traders have led by example, by taking meticulously calculated risks. Some are surprisingly humble while others flaunt their success, but all of these successful traders share an unshakable sense of confidence, which guides their financial performance.
George Soros
George Soros was born in 1930. Soros began his financial career at Singer and Friedlander in London in 1954 after escaping Nazi-occupied Hungary during World War II. He worked at a series of financial firms until he established the Soros Fund Management in 1970. The firm has gone on to generate more than $40 billion in profits in the last five decades.
He rose to international fame in 1992 as the trader who broke the Bank of England, netting a profit of $1 billion after short selling $10 billion in British pound sterling (GBP). On September 16, 1992, as a result of this trade the United Kingdom withdrew the currency from the European Exchange Rate Mechanism after failing to maintain the required trading band. This event is now infamously referred to as Black Wednesday. This incredible trade was a highlight of his career and solidified his title of one of the top traders of all time. Soros is currently one of the thirty wealthiest individuals in the world.
Stanley Druckenmiller
Stanley Druckenmiller grew up in a middle-class suburban Philadelphia family. He began his financial career in 1977 as a management trainee at a Pittsburgh bank. He quickly rose to success and formed his company, Duquesne Capital Management, four years later. Druckenmiller then successfully managed money for George Soros for several years. In his role as the lead portfolio manager for the Quantum Fund between 1988 and 2000 his career flourished.
Druckenmiller also worked with Soros on the notorious Bank of England trade, which launched his rise to stardom. His fame intensified when he was featured in the best-selling book The New Market Wizards, published in 1994. In 2010 after surviving the 2008 economic collapse, he closed his hedge fund, admitting he was worn down by the constant need to maintain his successful track record.
Andrew Krieger
Andrew Krieger joined Banker’s Trust in 1986 after leaving a position at Solomon Brothers. He acquired an immediate reputation as a successful trader, and the company rewarded him by increasing his capital limit to $700 million, significantly more than the standard $50 million limit. This bankroll put him in a perfect position to profit from the October 19, 1987, crash (Black Monday). (See also How Forex Speculators Profited From Famous Currency Meltdowns.)
Krieger focused on the New Zealand dollar (NZD), which he believed was vulnerable to short selling as part of a worldwide panic in financial assets. He applied the extraordinary leverage of 400:1 to his already high trading limit, acquiring a short position bigger than the New Zealand money supply. As a result of this brilliant trade, he netted $300 million in profits for his employer. The following year he left the company with $3 million in his pocket from the trade.
Bill Lipschutz
Bill Lipschutz started trading while attending Cornell University in the late 1970s. During that time, he turned $12,000 into $250,000; however, he lost the entire stake after one poor trading decision. This loss taught him a hard lesson on risk management that he carried throughout his career. In 1982, he began working for Solomon Brothers while he pursued his MBA degree.
Lipschutz migrated into Solomon’s newly formed foreign exchange division at the same time just when forex markets were exploding in popularity. He was an immediate success, earning $300 million per year for the company by 1985. He became the principal trader for the firm’s massive forex account in 1984, holding that position until his departure in 1990. He has held the position of director of portfolio management at Hathersage Capital Management since 1995.
Bruce Kovner
Bruce Kovner, born in 1945 in Brooklyn, New York, didn’t make his first trade until 1977 when he was 32 years old. He borrowed against his personal credit card at that time to buy soybean futures contracts and netted a $20,000 profit. He subsequently joined Commodities Corporation as a trader, booking millions in profits and gaining a solid industry reputation.
He founded Caxton Alternative Management in 1982, transforming it into one of the world’s most successful hedge funds, with more than $14 billion in assets. The fund’s profits and management fees, split between commodity and currency positions, made the reclusive Kovner one of the biggest players in the forex world until he retired in 2011.
The Bottom Line
The five most famous forex traders share similar attributes such as self-confidence and an incredible appetite for risk.
