3 Most Successful Traders and Their Habits

The most successful traders in the market have built their fortunes by consistently trading and making small but positive gains over a long period of time. New traders joining the Forex market can learn from their example and become successful by focusing on consistent, profitable trades.

In this blog post, we cover the habits of some of the most successful traders in the Forex market.

The Habits of Most Successful Traders

There are five character traits that are found in the top Forex traders in the world. These include:

  1. Discipline – Consistent trading control and research on the market. Good discipline involves maintaining composure at all times and taking rational decisions when under pressure.
  2. Good Intuition & Foresight – This is one of the most difficult traits to assess and acquire for making successful Forex trades. Traders with good foresight are able to make better trades than ones who cannot understand the underlying patterns in the market.
  3. Financial Understanding – A college degree and sound understanding of financial and economic indicators is a must for improving profitability for your trades.
  4. Technical Knowledge – This is another prerequisite for most successful traders. Technical analysis is used fairly often in Forex trading and sound knowledge of the data allows more profitable trading.
  5. Risk Management – Every Forex trader has an affinity for a level of risk. Successful traders are good at risk assessment, control and management.

George Soros

George Soros is considered one of the best Forex traders in the market. He is known for making a number of investments that turned out in his favor. It is believed that he made more than $1 billion in a single day when he went up against the Bank of England and shorted the British pound in 1992.

He is the founder of Quantum Fund, a prominent hedge fund that deals in a variety of investments. The fund has reportedly generated an average annualized return of over 20%.

In 1991, Britain joined the European Exchange Rate Mechanism, ERM and agreed to maintain the pound against a certain band in relation to the German Mark. Soros realized that the Pound was overvalued compared to the Mark and started shorting a position in sterling. Some report that he shorted more than $1.5 billion during the next six months.

The Bank of England tried to defend the currency by raising interest rates. However, they soon realized that they would end up paying huge amounts of money if they kept raising interest rates. Around this time, the German officials announced that they would consider realignment within the ERM.

Soon after this announcement, Soros raised the size of his bet. He increased his $1.5 billion shorting position to a massive $10 billion in September. He knew that the British government was having difficulty maintaining the GBP. They would either keep the Pound propped up and he would lose a little money, or they would buckle under pressure and he would make huge gains.

The British government, unable to counter the pressure, decided to abandon the ERM on Sept. 16, 1992. The pound fell by 15% against the German mark and 25% against the U.S. dollar on the next day with Soros reportedly making over a billion dollars on the same day.

Stanley Druckenmiller

Stanley Druckenmiller worked as a trader for Soros’ Quantum Fund, making successful Forex trades for over a decade. At the end of the cold war, there was a huge pressure on the German Mark due to the reunification of East and West Germany.

The government depressed the currency to an extreme level and Druckenmiller, feeling the currency was undervalued, purchased more than 2 billion Marks. The returns came within months when the German economy started booming and the Mark rallied considerably.

Bill Lipschutz

Bill Lipschutz was the principal trader with the FX department at Salomon Brothers in the 1980s. During his career, he helped shape the development of the global FX markets around the world.

He also earned his company hundreds of millions of dollars in successful trades making him one of the most successful forex traders in the last 50 years. He also wrote several books on Forex trading for newcomers.

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