Most currency traders avoid the limelight 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 investment industry.
These individuals offer guidance to forex traders at the start of their careers and to journeymen who are looking to improve their bottom-line results. These traders have led by example by taking meticulously calculated risks. Some are surprisingly humble and others flaunt their success. What they all have in common is that they share an unshakable sense of confidence and this guides their financial performance.
- George Soros rose to international fame when he broke the Bank of England in 1992.
- Stanley Druckenmiller worked with Soros on the notorious Bank of England trade.
- Anthony Krieger netted $300 million for his employer as a result of the Bank of England trade.
- Bill Lipschutz began working for Salomon Brothers in 1981 and was earning more than $300 million per year for the company by 1985.
- Bruce Kovner founded Caxton Associates in 1983, transforming it into one of the world’s most successful macro hedge funds with more than $12 billion in assets.
George Soros was born in 1930. He began his financial career at Singer & Friedlander in London after leaving Budapest, Hungary in 1947. He worked at a series of financial firms until he established Soros Fund Management in 1973. The highly successful firm reportedly went on to generate $22 billion in profits in August 1998.
Soros rose to international fame in 1992 as the trader who broke the Bank of England, netting a profit of $1 billion after short-selling a reported $10 billion in British pound sterling (GBP). The U.K. withdrew the currency from the European Exchange Rate Mechanism on Sept. 16, 1992 after failing to maintain the required trading band due to Soros’ trade. This solidified a day known as Black Wednesday in history.
This incredible trade is a highlight of Soros’s career. It cemented his title as one of the top traders of all time.
Stanley Druckenmiller grew up in a middle-class suburban Philadelphia family and began his financial career in 1977 as a management trainee at The Pittsburgh National Bank. He quickly rose to success and formed his company, Duquesne Capital Management, three years later. Druckenmiller then successfully managed money for George Soros for several years in his role as the chief strategist for the Quantum Fund between late 1988 to 2000.
Druckenmiller also worked with Soros on the notorious Bank of England trade and this launched his rise to stardom. His fame intensified when he was featured in the best-selling book The New Market Wizards, published in 1992. He closed his hedge fund, admitting that he was worn down by the constant need to maintain his successful track record after surviving the 2008 economic collapse.
Andy Krieger joined Banker’s Trust in 1986 after leaving a position at Salomon Brothers. He acquired an immediate reputation as a successful trader and the company rewarded him by increasing his capital limit to $700 million. This was significantly more than the standard $50 million limit. This bankroll put him in a perfect position to profit from the Oct. 19, 1987 crash known as Black Monday.
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 greatly leveraged his exposure by using foreign currency options combined with his already high trading limit, acquiring a short position that may have rivaled the New Zealand money supply.
He netted $300 million in profits for his employer as a result of this trade. He left the company unexpectedly the following year. It was said that he was unhappy with a reported $2.5 to $3 million bonus.
Bill Lipschutz started trading while attending Cornell University in the late 1970s. He turned $12,000 into $250,000 during that time but he lost the entire stake after one poor trading decision. It was a hard lesson on risk management that he carried throughout his career.
He began working for Salomon Brothers in 1981 while he pursued his MBA degree. Lipschutz migrated into Salomon’s newly-formed foreign exchange division at the same time forex markets were exploding in popularity. He was an immediate success, earning $300 million-plus 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 went on to become the Principal and Director of Portfolio Management for Hathersage Capital Management.
Bruce Kovner was born in 1945 in Brooklyn, New York. He didn’t make his first trade until 1977 when he was 32 years old. He borrowed against his personal credit card to buy soybean futures contracts and netted a $22,000 profit. He subsequently joined Commodities Corporation as a trader, booking millions in profits and gaining a solid industry reputation.
He founded Caxton Associates in 1983, transforming it into one of the world’s most successful macro hedge funds with more than $12 billion in assets. The fund’s profits and management fees were split between financial and commodity positions and made the reclusive Kovner one of the biggest players in the forex world until he retired in 2011.
What Is the European Exchange Rate Mechanism?
The European Exchange Rate Mechanism (ERM) monitors exchange rate fluctuations between the euro and the currencies of European Union countries that don’t use the euro. These include Denmark and Bulgaria. The ERM that’s in place as of 2024 is the second version and is referred to as ERM II. It was put in place in January 1999.
What Caused the 2008 Economic Collapse?
Referred to as the “Great Recession,” the 2008 economic collapse was largely blamed on the U.S. housing market. Real estate sales soared in 2006 just as residential construction began declining. Significant mortgage market losses eventually affected global markets and plunged the U.S. into a recession by December 2007.
What Is Short Selling in Investing?
A short sale occurs when an investor sells a stock they don’t own. The stock is effectively borrowed. It’s a tricky proposition that requires experience and finesse. An investor can purchase the stock at a lesser price if the price plunges but they’ll suffer a loss if they buy it back at a higher price.
The Bottom Line
From Soros to Kovner, the common theme among this list of famous forex traders is that they have profited mightily from their thoughtful trades. Coupled with self-confidence and an incredible appetite for risk, this has cemented them among the best and richest investors in history.