Famous traders and the stories behind them
Trying to achieve success in this or that sphere, people often look at history. History tells us how the great of this world achieved their financial goals, what they did wrong, and what they came to in the end.
Trading is one of the hardest jobs. It is hard to become a proficient trader without a professional education by a qualified specialist. What do we have left? – Learning about the experience of those who have already achieved outstanding results and to be educated by them: by what they say, do, by their books and video-seminars.
We will plunge in the world of the amazing stories of the world’s top traders.
The most successful traders in the world
This list is made by me. It is based on the well-known facts about the life of the people who have successfully traded in the world stock and Forex markets (hence, there will be some of the most successful Forex traders of all time). I tried to take into account not only the profit made by them in the stock exchange but also their contribution to the development of modern trading. Their intangible inheritance is what’s important to us, while their material success is only the proof of its importance.
Are you ready? Let’s meet them.
Larry R. Williams – made $1 million out of $10 thousand in a year
Undoubtedly, the genius of the trading world. Larry was born in October 1942 in Miles City, Montana, USA. He is a journalist by profession.
After graduating from the University of Oregon, he went to the metropolis to conquer journalistic peaks and develop in this direction. Williams did not stay long in New York and returned to his hometown, where he organized his own company called The Oregon Report.
Why did a journalist become a trader, and how could he then become one of the most successful stock traders?
The idea of trading on the stock exchange arose with Williams when he worked in his own newspaper. He published economic data on large US companies and noted that on the rise and fall of stocks, you can increase your income quite well. Initially, everything was planned for additional earnings on securities.
Larry began his trading path by going around the local libraries of Oregon – then there was no Internet. But this information was clearly not enough, and he makes a decision, taking advantage of his official position, to interview employees of brokerage firms.
The first time he got on the stock exchange in the second half of the 60s. He passed the qualification exam in a year and then received the right to engage in financial advice. At first, he gave advice to beginners, then he began to trade himself. However, technical and fundamental analyses, which existed at that time, didn’t work for Larry: he traded in the short-term, and all the trading strategies that were popular at that time were based on a medium or long-term approach.
It was then that the trader thought about his own developments. But … trading life is not a fairy tale, and until the early 70s, Williams had no good results. Probably, he would not have achieved anything in this field, if not for the advice of a friend – to try trading in derivatives.
Derivatives allowed trading with low trading commissions, leverage and volatility allowed a trader to manage capital more efficiently. Larry began to work on improving existing strategies and developing his own forecasting methods.
His most famous achievement is his victory in the Robbins World Cup. Larry was able to make $1 million 100 thousand units of American currency out of $10 thousand dollars in a year. This is a result of 11,000% per annum! At the moment, this is an absolute record in this contest. After that, he repeatedly proved his skills, increasing capital from year to year.
Now the trader is 77 years old, and he is retired. Until now, Larry has provided educational and consulting services, wrote many books on trading, conducted seminars and gave invaluable advice to beginners.
Outstanding Achievements:
- Wrote several useful books on trading. Reviewed and explained in detail the seasonality of the markets.
- Described a trading methodology based on the analysis of reports on the positions of large traders (COT reports).
- Created his own indicators: Willams R%, Ultimate Oscillator, COT Indices.
Steven A. Cohen – net worth of $9,2 billion
Steven A. Cohen was born in 1957. He graduated from the University of Pennsylvania with an economics degree. He played poker when he was in high school and spent the money he won buying shares. After 6 years of trading, he received $75 million in management. From that moment he started his trading ascendance.
Having come to financial independence and saved some money for the future, Steven starts his own hedge fund, SAC Capital Partners, and gets only $13 million in management. Then, hedge funds took 20% of investor’s profits as a reward. Cohen had a higher management fee than an average hedge fund would in that time. However, investors knew not of the returns the fund would bring.
For more than 20 years, from 1992 to 2013, the SAC had an average return rate of 29% under a 3% management fee and a 50% performance fee. After that period, a scandal regarding insider trading charges broke out. The SAC pleaded guilty to them after all and paid $1.2 billion in penalties. Due to that, Cohen decided to found a new company, Point72 Asset Management, which eventually took over the SAC.
Steve now has a personal capital of $9.2 billion according to the Bloomberg Billionaires Index. He is 62 years old. His money is managed by Point 72 Asset Management.
Outstanding Achievements:
- Set new profitability standards for hedge funds.
- Founded the unique and one-of-a-kind “Point72 Academy” to train hedge fund managers.
- Predicted the crisis of 2008, only made a mistake with the scale. Despite its knowledge of this, the fund lost 19% nevertheless.
Paul Tudor Jones – net worth of $5 billion
Paul Tudor Jones II was born on September 28, 1954, in Memphis, Tennessee. He graduated from the University of Memphis and then received a degree in economics from the University of Virginia.
Paul began his career as a clerk in the exchange room, then became a broker of the large and well-known company E.F. Hutton. Jones worked for 2.5 years as an independent trader, then enrolled at Harvard Business School. However, Paul considered the knowledge that was given there useless and decided to finish training at an early stage.
Jones wanted to develop further. He valued practical knowledge above theoretical, so he turned to his uncle, a cotton trader, for help. The uncle introduced him to a colleague, Eli Tallis. He agreed to teach him the art of exchange. For some time he was a personal broker of Tallis and traded on the New York Cotton Exchange. Their collaboration did not last long, but it was fruitful. Paul calls the experience with Eli invaluable.
In 1980, Paul Tudor Jones founded his own investment fund and named it the Tudor Futures Fund. The fund received $1.5 million in management.
During the first five years of its work, the fund showed an annual return of over 100%.
During the 1987 Black Monday, when the Dow Jones index collapsed by more than 20%, the Jones fund not only resisted, but also showed a yield of 62% in October, and by the end of the year, profits exceeded 200%. The founder of the fund got nicknamed Black Monday Prophet.
How did he manage to earn? He analyzed the situation that preceded the collapse of financial markets in 1929, compared it with the current one and bet on the decline. That’s how his story became a forex success story.
What methods did the active trader follow? Until recently, Paul relied exclusively on manual trading and his own market intuition. Only recently, in the view of low, and sometimes negative, profitability, he decided to reduce staff and hire programmers and IT specialists to write software that will help traders but not replace them.
Now the best trader is 131 in the Forbes 400 ranking with a net worth of $5 billion. He is 65 years old, is married and has four children.
Outstanding Achievements:
- In 1987, according to the New York Times, Tudor Investment Corporation earned $ 100 million.In 1990, the corporation’s assets reached $385 million.In 1992, the fund began to manage $650 million in funds.In 1993, the company had $1 billion in management.
- Had the reputation of a trader who manages money impeccably.
- He predicted Black Monday in 1987 and made money on it.
John D. Arnold – made $750 million trading
John Douglas Arnold was born in Dallas, USA, in 1974. He entered Vanderbilt University and graduated in mathematics and economics in just 3 years.
His trading career began in 1995 at Enron Corporation as an oil analyst, and then as an assistant trader. At that time, John, who was only 21, used modern technologies, such as Internet trading and algorithmic trading. Due to this, he managed to show excellent profitability and was noticed by the management. Enron’s entrusted him with trading natural gas derivatives, in addition to oil, and then he was promoted to manager.
In 2001, despite the flaring scandal around the company’s endeavours to conceal losses through offshore companies, Arnold earned $750 million for the company, an achievement for which he received a bonus of $8 million. In total, during his time at the corporation, he brought in more than $1 billion in profit.
After the bankruptcy of Enron, John decides to “play big” and opens his own hedge fund called Centaurus Advisors, LLC. In the company, he appoints himself as the general manager.
Thanks to his outstanding abilities, John managed to show an annual return of more than 150% and even 317%, which is simply unbelievable for the energy sector. The year 2005 is considered unsuccessful for the company – then the profit was “only” 178%.
Unfortunately, no one can show such profits in the financial markets always. Centaurus Energy was no exception. In 2010, the fund showed the first loss of about 4%. In 2011, according to Forbes, it earned 9%. Arnold realized that the times had changed and trading had changed and decided to close the fund. In 2012, his decision was implemented.
What is the secret of his method? Nobody knows for sure. The most successful trader is a closed figure. He rarely appears in public. Some secular media do not write about him, he does not commit extravagant acts. John keeps his trade secret to himself.
Outstanding Achievements:
- According to Reuters, Centaurus Energy was “the most successful energy hedge fund ever.”
- The average yield of the hedge fund was 130%.
- Together with his wife, he created the Laura and John Arnold Foundation, a charitable foundation with a capitalization of $2.2 billion. It’s double that of the American Red Cross.
- John D. Arnold retired at 38. At the moment, Forbes estimates his net worth at $3.3 billion.
George Soros – earned $1 billion in 1 day
Of course, George Soros is one of the top Forex traders. Perhaps, he is the best Forex trader in the world, and, for sure, he is the best day trader in the world. Soros was born in 1930 in Hungary. A Jew by nationality, the name given to him at birth was Gyorgy Schwartz. The family later changed their family name to the Hungarian Soros. This was done before the Second World War, and, as it soon turned out, not in vain. In general, his father was a very shrewd person and knew how to take risks. George himself would repeatedly recall his father’s lessons in the future.
In 1947, Soros left Hungary for London, England. In 1949 he became a student at the London School of Economics, graduating in 1952. Having wandered around London for some time without work or doing some odd jobs, George, at last, finds a job at the merchant bank Singer and Friedlander in 1954.
After 3 years, with a small amount of money on his hands, Soros, a future Forex market trader, goes to America. There, thanks to his father’s help, he got a job at a Wall Street brokerage firm. Soros created his own financial instrument, combining stocks, bonds and warrants, and began to trade it. The operations that he carried out are international in nature.
In 1959, George is transferred to the position of an analyst at the investment company Wertheim & Co. After working there until 1963, he spent the 3 subsequent years mostly revising his philosophy dissertation.
He joined Arnhold and S. Bleichroeder as a vice president. It is worth noting that the company traded in the European stock markets.
In 1967, Soros became the head of two investment funds established by Arnhold and S. Bleichroeder with an initial capital of only $250 thousand. However, he managed to find investors and increase the capital of the funds significantly.
After three years of successful work, George accumulated a substantial amount of money and created his own hedge fund, calling it “Quantum”. Soon, Quantum would bring many billions of dollars to its creator, become world-famous and would be universally recognized for its incredible success in investing.
Soros and Bank of England
The most outstanding achievement of Soros is how he became a “man who broke the Bank of England”. This trade is associated with the British pound, so Soros is, in fact, a Forex trader. Just not quite ordinary an ordinary one. Many Forex millionaires and Forex investors endeavoured to do something like that. Few could repeat the success.
Before the description of the operation, it is worth mentioning the name of Stanley Druckenmiller. He was a 30-year-old manager who was hired by George to manage the fund in 1992. Without Druckenmiller’s hint, there wouldn’t be anything.
It is said that a couple of years prior to the decisive blow, the Quantum fund was quietly buying up the pound sterling and British bonds. Thus it managed to accumulate the amount of 3.9 billion pounds. But this wasn’t enough for Soros, and his structures additionally took loans worth $3 billion and then converted this money into 1.6 billion pounds. As a result, the sum of the operation amounted to 5.5 billion pounds.
September 9, the pound began to slowly fall. Druckenmiller suggested that Soros seize the moment and “help” the currency to fall even lower. September 16. Soros shorts all 5.5 billion pounds against the German mark. Pound collapses. Other major players around the world are joining it. Bank of England is horrified and can do nothing – it is simply not ready for this. The pair GBP/DEM (pound sterling/German mark) falls by 2.5% per day. Imagine the huge potential for Forex trading and specifically your day trade! GBP/USD loses 4.3%. Soros earns $1 billion.
It is clear that not everything was so simple, and not only Soros drowned the British pound, but his 5.5 billion pounds were decisive. In addition, given the global nature of the economy, Quantum traded not only in pounds. There were operations with other currencies of European countries. All this brought a colossal profit to the fund.
A similar strategy was used by Soros in 1997, the financier played a game to lower the currencies of Indonesia, Malaysia, the Philippines and Singapore. It caused a great economic crisis and a return of the economies of those countries to the state they had been 15 years prior to that.
Of the failures, an investment of $1.875 billion in the Russian company Svyazinvest in 1997 was definitely one. A year later, the global financial crisis erupted, and stocks fell in price by more than two times. There were also losses of $300 million in shares of Internet companies in 1999.
The Quantum Fund lasted until 2011 and then was transformed into a family investment group.
Outstanding Achievements:
- Earned $ 1 billion in just one day.
- Developed the “reflexivity theory” which states that future price forecasts are based not only on economic and political changes but also on psychological factors.
- Founded the Open Society Institute. According to the BBC, as of September 2019, Soros’ charitable donations amounted to about 32 billion US dollars.
- He went down in history as a financier who changed the rules of the game in the foreign exchange market.
How do the best traders in the world think?
Now you’ve learned about some of the most famous and influential traders. The list is not full, yet it shows different trading techniques as used in the financial markets and in the Forex market in particular. There can be no end to talking about other traders’ successes, but let’s think of this: what unites the above-mentioned financiers? How do Forex traders think and how do they become rich Forex traders? Thanks to what have they succeeded?
Almost every investor in this article had uneasy childhood and adolescence. Soros survived WWII in occupied Hungary being a Jew, Larry Williams had to educate himself finding only small pieces of information on the stock market in the local libraries. Others also didn’t have it fast and easy. Some of them were undoubtedly talented. But talent is something you have to work on to develop.
Analyzing the character of those pro traders, one might make an assumption that those traders always knew their main goal and sought it. From their young age, the best traders tried to receive knowledge from various sources: whether it be libraries, a father, or familiar cotton traders – it did not matter, the main thing was the result.
Everyone, one way or another, had dizzying highs and painful falls. Someone left the world of investment for several years, saved up strength and then returned. Trading for such people was and remains the goal of life, it is life itself.
To summarize, one thing is certain for sure: without proper perseverance, unlimited faith in yourself, highly specialized knowledge and time, it is impossible to become a professional. If you have a clear goal and you are working to achieve it, everything will work out.
Who knows, maybe right now a new star is lighting up in the sky that we don’t know about and is now reading this article. Maybe this star is already taking the first successful steps? Want to know more about this? Then I recommend that you familiarize yourself with a useful service called “Copy Trading“. Select traders by profitability, copy their trades to your trading account and, thanks to the analysis of trades, you can learn from them through this system: https://my.litefinance.org/traders.
P.S. Hurry up, or your place at Forbes may be taken by some other trader!