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10 Most Successful Traders of All Time

Daniel Rogers

May 12, 2022 17:04

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People frequently examine the past when attempting to succeed in a given field. History reveals how the world's affluent attained their financial goals, what they did wrong, and where they ended up.

 

Trading is among the most challenging jobs, and it is difficult to become a proficient trader without formal training from a qualified specialist. What do we have remaining? Educating oneself on the experience of individuals who have already achieved remarkable outcomes through their words, actions, books, and video seminars.

 

We will immerse ourselves in the incredible tales of the world's best traders. This list is based on the well-known life details of those who have successfully traded on the global stock and Forex markets (hence, there will be some of the most successful Forex traders). We attempted to take into account their stock market profits and their contribution to the evolution of modern trading. We value their intangible legacy more than their material success, demonstrating its significance.

1. Jesse Livermore

If a movie is ever made on a trader, it should be based on Jesse Livermore's life. Livermore, who was born in 1877, fled away in order to avoid a life of farming.

 

Once he arrived in Boston, he began posting stock quotes for a broker at 15. Here, Livermore purchased his first stock and generated a $3.12 profit on a $5 investment. He quickly began to make more money trading stocks than he was compensated, which drove him to quit his job and start making leveraged stock market wagers. Jesse Livermore was so skilled at trading that he was eventually banned from the Bucket Shops, where he earned his stakes.

 

Then, he began trading on Wall Street but suffered enormous losses. These were not the result of an error but rather because the ticker tape was not updated quickly enough. At age 24, he eventually struck it rich when he turned $10,000 into $500,000 in the stock market. During the Panic of 1907, Livermore was 30 years old and earning $1 million a day.

 

Livermore was at the peak of his game, which made him a well-known elite, but by 1915 he had declared bankruptcy twice.

 

Following World War I, Livermore began purchasing cotton to acquire market dominance, and he had to be stopped by the then-president of the United States, Woodrow Wilson. At Woodrow's request, Livermore refrained from moving further on cotton.

 

When President Woodrow asked Livermore why he was attempting to corner the cotton market, this famous quip was born. During the 1929 recession, he entirely distinguished himself. When market crashes were unknown, Livermore amassed a $100 million fortune with massive short positions. He would have been a billionaire today if he had done so, and this earned him the moniker "The Big Bear of Wall Street."

 

Despite three bankruptcies throughout his lifetime, what truly distinguished him was his ability to recoup and achieve immense wealth. However, Jesse Livermore could not survive his third bankruptcy and committed himself, resulting in his death. 

2. Steven A. Cohen

In 1957, Steven A. Cohen was born. The University of Pennsylvania awarded him a degree in economics. In high school, he earned money at poker and invested it in stocks. Six years of trading yielded $75 million in managerial compensation. From that point on, he began his trading ascent.

 

Steven launches his hedge fund, SAC Capital Partners, with only $13 million in assets under management after achieving financial independence and saving for the future. Then, hedge funds collected 20% of investor earnings as compensation, and Cohen's management fee was more than the average hedge fund. However, investors were unaware of the fund's expected profits.

 

From 1992 to 2013, the SAC had an average return rate of 29 percent, with a 3 percent management charge and a 50 percent performance fee. This period spanned more than two decades. After that period, a crisis involving allegations of insider trading erupted. In the end, the SAC pleaded guilty and paid $1.2 billion in penalties. As a result, Cohen opted to establish a new firm, Point72 Asset Management, which eventually acquired the SAC.

3. George Soros

George Soros, a billionaire, known as "the king of Forex trading" and "the man who broke the Bank of England," is unquestionably the best trader. Due to his tribulations as a Jew growing up during World War II, no one expected his success.

 

Born Gyorgy Schwartz, his family changed their names in order to survive and avoid Nazi detection. Before he graduated from the London School of Economics, Soros worked as a waiter and a railway porter after moving to England. This opened the door for him to enter the world of finance when he was hired as a merchant banker by Singer & Friedlander.

 

Father helped him relocate to the United States to work at an investment firm on Wall Street. After numerous successful spells advancing his career at several organizations, he decided in 1970 to launch his hedge fund, Quantum.

 

Here is where Soros rose to prominence. In 1990, he opted to short the British Pound, his most important transaction. A few years before the trade, Quantum continued to purchase the British Pound and accumulated 3.9 billion pounds. In addition, Soros borrowed to increase the fund's total pound assets to 5.5 billion pounds.

 

The decline of the Pound began on September 9. This drove Soros to short all 5,5 billion pounds against the German Mark on September 16 - the infamous "Black Wednesday." This trade enabled Soror to earn $1 billion in a single day. This situation forced the Bank of England to withdraw from the European Exchange Rate Mechanism. Consequently, he was dubbed "The Man Who Broke the Bank of England."

 

Soros employed a similar tactic during the 1997 ASEAN financial crisis. Here, Soros targeted the currencies of Indonesia, the Philippines, and Singapore, and the economic catastrophe set the countries back 15 years.

4. Paul Tudor Jones

Paul Tudor Jones II was born in Memphis, Tennessee, on September 28, 1954. He obtained a degree in economics from the University of Virginia after graduating from Memphis.

 

Paul began his job as a clerk in the exchange room before becoming a broker for the well-known major corporation E.F. Hutton. Jones worked as a freelance trader for 2.5 years before enrolling at Harvard Business School. Paul, however, deemed the information provided there to be useless and opted to end his training early.

 

Jones desired additional development. Practical knowledge was more important to him than theoretical knowledge. Therefore he sought assistance from his cotton trader uncle. The uncle introduced him to Eli Tallis, a colleague, and he agreed to teach him exchanging techniques. For some time, he was Tallis' broker and dealt on the New York Cotton Exchange. Their partnership did not last long, but it was productive. Paul describes the experience with Eli as priceless.

 

In 1980, Paul Tudor Jones established the Tudor Futures Vehicle, his investment fund. The fund received management fees of $1.5 million. In the first five years of its existence, the fund saw an average annual return of about 100 percent.

 

During 1987's Black Monday, when the Dow Jones index fell by more than 20%, the Jones fund resisted and showed a yield of 62% in October and profits of over 200% by the end of the year. The fund's founder was dubbed the Black Monday Prophet.

 

How did he earn a living? He researched the circumstances preceding the 1929 financial market collapse, compared them to the present, and gambled on a downturn. Thus, his story became an example of forex success.

 

Which strategies did the active trader employ? Paul relied only on manual trading and his market intuition until lately. In light of low and occasionally negative profitability, he recently decided to decrease staff and hire programmers and I.T. professionals to develop software that will assist traders but not replace them.

5. Jim Simons

Jim Simons, Wall Street's "World's Smartest Billionaire" or "Quant King," is definitely in a class. During the Cold War, Simons, a respected mathematician for his Chern-Simons theory, also cracked Russian codes.

 

Simons did not begin trading stocks until he was in his late thirties. He was a pioneer in quantitative trading, data analysis, and pattern detection, which distinguished him. After establishing the hedge fund Renaissance Technologies, Simons made it his mission to hire scientists and mathematicians exclusively, avoiding Wall Street talent. From 1994 to 2014, the Renaissance Technologies Medallion fund returned a staggering 71.8%. It would help if you were perplexed as to why you've never heard of the Medallion fund. This is likely because Simons closed the fund to all outsiders except business personnel in 2005.

 

Today, Simons is worth $24.6 billion, making him one of the most successful and renowned traders.

6. John Paulson

John Paulson amassed a personal fortune of $4.4 billion through managing other people's funds. Paulson, born in 1955, established his reputation and most of his future by risking a massive amount of cash against the U.S. housing market during the 2007–2008 global financial crisis.

 

Paulson purchased insurance against subprime mortgage defaults before the 2007 market meltdown. On the fall of the subprime mortgage market, dubbed the most significant move ever, he earned an estimated $20 billion.

 

However, since that wager, his record has been inconsistent, and Paulson struggled to repeat this success in the years following the financial crisis.

 

Paulson & Co.'s assets under management have decreased to $10 billion as of January 2020, from a peak of $36 billion in 2011 due to investors' flight due to failed bets on gold, healthcare, and pharmaceutical stocks.

 

Paulson said earlier this year that the fund would cease handling money for outside customers and become a family office. In 1994, he founded the fund.

7. Richard Dennis

Richard Dennis was one of the few traders turning a modest sum of money into millions.

 

Dennis, also known as the "Prince of the Pit," is rumored to have borrowed $1,600 when he was 23 years old and turned it into $200 million trading commodities in approximately ten years. Even more intriguing is that he only exchanged $400 of the $1,600.

 

In addition to achieving enormous success as a commodities trader, he also founded the renowned "Turtle Traders Group." Dennis began trading on his account at the Mid America Commodity Exchange using small contracts.

 

In 1973, he earned a profit of $100,000. The following year, he profited $500,000 by taking advantage of a rising soybean market. At the year's end, he became a fantastic millionaire.

 

However, he suffered enormous losses after the 1987 Black Monday stock market crisis and the 2000 dot-com bubble explosion.

 

Dennis is famous for making and losing a great deal of money, but he is also renowned for experimenting. A handful of men and women were recruited and trained to trade futures by him and his friend William Eckhardt. According to a former student, these so-called Turtle Traders generated earnings of $175 million over four years.

8. Peter Schiff

Peter Schiff, often known as "Dr. Doom," is an American trader and investor who became famous for predicting the 2007-2010 stock market catastrophe. Peter was born in 1963, and his father, a notable tax protestor, prepared the route for his economic interests. In 2006, Schiff warned of an impending financial disaster and urged people to behave accordingly.

 

In the years preceding the crisis, he appeared on several financial news programs to warn the public about the recession, despite receiving criticism. In his 2007 book, he argued that the U.S. government's economic policy was wrong and a significant supply-and-demand imbalance. He predicted that hyperinflation would bring about an economic collapse.

9. Nick Leeson

Nick Leeson, a derivatives trader, born in 1967, precipitated the 1995 collapse of Barings Bank. Before the controversy, he oversaw the bank's Singapore business and ensured large profits through his deals. However, before the collapse, he made a few poor deals and began to lose enormous sums of money.

 

Leeson chose to conceal the losses from the bank since international oversight exempted him from reporting to a supervisor. He attempted to regain the capital by taking increasingly speculative wagers, such as a short straddle on the Nikkei. Unfortunately, the index saw a severe decrease overnight owing to the Kobe earthquake, and Barings Bank lost more than $1 billion despite frantic attempts to recuperate the losses. Leeson chose to depart the nation but was apprehended in Germany and sentenced to four years in prison.

10. John D. Arnold

John Douglas Arnold was born in 1974 in Dallas, Texas, United States. In just three years, he graduated from Vanderbilt University with degrees in mathematics and economics.

 

His trading career began in 1995 as an oil analyst and then an assistant trader at Enron Corporation. John, who was only 21 years old, currently utilizes technology such as Internet trading and algorithmic trading. Due to this, he was able to demonstrate exceptional profitability and garner management's attention. Enron entrusted him with trading natural gas derivatives and oil before promoting him to manager.

 

Arnold won a bonus of $8 million for earning $750 million for the company in 2001, despite the escalating scandal surrounding the company's efforts to conceal losses through offshore subsidiaries. During his tenure at the company, he generated more than $1 billion in profit.

 

John resolves to "play big" after Enron's bankruptcy and establishes his hedge fund, Centaurus Advisors, LLC. He shows himself as the company's general manager.

 

John was able to generate an annual return of more than 150 percent and even 317 percent, which is unheard of in the energy industry, due to his exceptional abilities. The year 2005 was a failure for the corporation, as its profit margin was "only" 178 percent.

 

Unfortunately, no one can consistently generate such returns on the financial markets. Centaurus Energy did not stand out. In 2010, the fund saw its first loss of approximately 4 percent. According to Forbes, it earned 9 percent in 2011. Arnold realized that the times and trading had changed and chose to close the fund. His ruling was executed in 2012.

 

What is the key to his strategy? No one knows for sure. A closed figure represents the most successful traders. He is rarely seen in public, some secular media do not cover him, and he does not engage in lavish behavior. John safeguards his commercial secrets.

How to Become a Successful Trader

To be a good trader, you need a method that helps you maintain consistency and deal with adverse market fluctuations. You must also avoid becoming excessively emotional. To be a good trader, there is no one-size-fits-all method, but there are a few steps you may take to understand both the fundamentals and intricacies of trading: 

Conduct Research

Improving your financial market knowledge is the first step to becoming a good trader. Start by analyzing the various trading markets and using Top1 Markets to hone your trading skills. Remember, there is nothing like too much knowledge; if you want to be a great trader, you must continually increase your expertise. 

Develop a Trading Strategy

A trading plan is a strategy for how you will trade. It is determined by your trading approach and helps you measure your objectives and motivation. In addition, your trading plan addresses your risk management strategy and preferred analysis technique.

Practice Your Trades

If you wish to implement your trading strategy, you can simulate trades on a demo account. You can hone your skills with a demo account without immediately losing your funds. Additionally, trading practice will help you perfect your trading technique and learn from your failures.

Conclusion

In conclusion, one thing is unquestionable: it is impossible to become a professional without the necessary persistence, unwavering self-confidence, highly specialized knowledge, and patience. Everything will work out if you have a well-defined objective and try to attain it.