Top 10 Most Successful Forex Traders in the World

02 October 2020

Some people think that becoming rich by Forex trading is highly unrealistic. However, the fact of the matter is that there are countless stories of traders who turned themselves from rags to riches. There are many traders who started out with relatively small amounts of capital but managed to turn it into millions and even billions of dollars.

In this guide, we will discuss the carriers and trading strategies of ten of the most successful Forex traders in the world. As we will see below, each of them has a unique approach to trading.

However, these market participants also have certain traits in common. All of them maintain the discipline in their trading, avoid making decisions based on emotions and work hard. They also had the courage to act on opportunities in the markets and earn some decent payouts in the process.

Finally, from their stories, we can realize that the perception that one needs to invest hundreds of thousands of dollars in the market to become rich by Forex trading is actually a misconception. It is possible to succeed with lower amounts of money, but most likely it will take time and a great deal of effort to achieve this goal.

Best professional FX traders

Here is the list of some of the best Forex traders in the world:

George Soros
Stanley Druckenmiller
Bill Lipschutz
Andrew Kreiger
Paul Tudor Jones
Michael Marcus
Richard Dennis
Bruce Kovner
Axel Merk
James (Jim) Simons

Most beginner traders start the trading journey because they think that it's an easy way to make a lot of money. In fact, all the top Forex traders are hard workers. Every successful trader has a different trading style and personality, which tells us that there are many ways to make money in the market. In order to succeed, it's important to find the trading strategy that fits your personality and, at the same time, shares the core principles that are followed by the best Forex traders in the world.

Now let us go through the stories and trading styles of the top 10 Forex traders in the world and see what we can learn from them.

George Soros

George Soros has worked at several banks in the United Kingdom and later in the United States, before starting his first hedge fund in 1959, called the ‘Double Eagle’. Later the fund was renamed to ‘Quantum Fund’.

The biggest success during the Soros trading career, came in 1992, during so-called the ‘Black Wednesday’. The fact of the matter was that the United Kingdom joined the European Exchange Rate Mechanism (ERM) during Autumn 1990. The mechanism was used for semi-pegging the British pound to the German Mark at 2.95 level.

According to the rules, the GBP/DEM exchange rate could diverge from 2.95 level by 6% in either direction. This means that the bottom of the range was at 2.773 level. Consequently, the British government had taken on the obligation to follow such an economic and monetary policy to maintain the GBP/DEM exchange rate within the range. To achieve this goal, the central Bank of England was directly participating in the market by purchasing and selling British Pound Sterling.

After the reunification of Germany, the German Bundesbank faced the challenge of the higher inflation rates. Consequently, the German policymakers started raising interest rates to reduce money supply and decrease inflation. Eventually, this policy did have its intended effect. However, it also led to some unintended consequences. The German mark started appreciating against some of its peers, including the pound.

At that time, the Bank of England was not independent, and interest rate decisions were made by the British government. It's worth mentioning that the UK interest rates were already quite high, leading to a downturn in the housing market, as well as the bankruptcy of several businesses. Considering these factors, it is not surprising that the British government was unwilling to increase the rates further to match the policies of the German Bundesbank.

This is exactly where the Quantum fund of George Soros comes into play. Soros identified a great trading opportunity, realizing that the pound was overvalued, and considering the circumstances, the GBP/DEM peg was highly unsustainable.

Consequently, on 16 September 1992, also known as the ‘Black Wednesday,’ the Quantum fund took a $10 billion short position with the UK pound currency pairs. The results were predictable: the pound began to depreciate significantly against the German mark and the US dollar, with the Bank of England spending billions of pounds to maintain the exchange rate. In addition to that, the UK government has authorized number of rate hikes. As a result, before the end of the trading day, the UK key interest rate has reached 15%.

The struggle continued for the entire day, but by evening, after holding various meetings of cabinet members and losing billions of pounds, the UK government had decided to give up and leave the European Exchange Rate Mechanism. As George Soros himself mentioned, his fund made in excess of $1 billion in profits in a single day. Since then, Soros is known as the man who broke the Bank of England. Therefore, it is not surprising that some people regard Soros as the best Forex trader in the world.

Under his leadership, the Quantum fund continued its successful trading business for the next two decades. By Summer 2011, the assets of the fund had reached $12 billion. However, at that time George Soros decided to turn the Quantum fund into the family investment group. Consequently, the fund returned all outside money to investors before the end of the year.

The current net worth of George Soros as of 2020 is above $8 billion. However, throughout his career he donated $32 billion to his ‘Open Society Foundations’, promoting liberal political causes across the globe.

Stanley Druckenmiller

Stanley Druckenmiller worked for the Quantum fund for more than 10 years and considers George Soros to be one of his mentors. After leaving his trading job, he established his own hedge fund called ‘Duquesne Capital’.

The fund turned out to be quite successful. He did achieve double-digit percentage returns for most of the years during his trading career and consequently attracted many investors. Stanley eventually retired, with his net worth exceeding $2 billion.

His trading theory recognizes that even some of the best Forex traders in the world can make the wrong decisions from time to time. Therefore, in order to succeed, traders need to minimize their losses when they are wrong and maximize their gains with the winning trades.

Stanley Druckenmiller attaches a great deal of importance to those aspects of trading such as capital preservation, risk management, and setting a proper risk/reward ratio in favor of the trader.

Bill Lipschutz

Bill Lipschutz first started trading when he inherited $12,000 from his grandmother. He managed to turn that money into 250,000 USD. However, he lost the entire amount in a single trade. That mistake has helped Bill to focus on risk management in his trading career. During the 1980s, he worked for Solomon Brothers at the Forex department. He turned out to be a great Forex trader. During his time in the company, he earned $300 million and gained fame.

In his interviews, Bill often stresses the importance of risk management. The mistake he made when he first started trading became his greatest teacher. The best forex traders do not waste mistakes. They use them for growth. Great risk management skills help traders attract investors and make more money by trading larger positions while taking small risks.

Andrew Kreiger

Andrew Kreiger started his trading career back in 1986 when he joined the Bankers Trust. According to the company's rules, the standard trading limit for traders in that company was set to $50 million. Through hard work and dedication, Andrew gained access to managing larger capital. After convinced that Andrew was a talented trader, the firm’s management decided to increase the trading limit for Kreiger to $700 million.

They were not disappointed. In fact, in 1987 Andrew Kreiger identified the New Zealand dollar to be highly overvalued. He took the opportunity and placed short position for NZD, using 1:400 leverage. It goes without saying that this was a quite risky bet. Yet, it paid off quite well. The New Zealand dollar fell by 5% against the US dollar and Kreiger earned $300 million for the firm. Later in his life.

Paul Tudor Jones

In 1980, Paul founded his hedge fund named Tudor Investment Corporation and started trading actively. Paul Tudor Jones made his name back in 1987 during the stock market crash. At that time, he held large-sized short positions. Paul successfully predicted the crash that made him massive returns.

Paul is actively investing in various asset classes, including stocks and Forex pairs. Back in 2013, he opened large positions against the Japanese yen. As the JPY lost ground against the other major currencies, Jones has made a 20% return on investment and expanded his net worth considerably.

According to Paul Tudor Jones, one of the main secrets of being a successful trader is to have an undying thirst for knowledge and information.

Michael Marcus

Next on our list of successful Forex traders is Michael Marcus. Michael Marcus is a legend among Forex traders. Michael used compounding and turned $30,000 initial investment into $80 million dollars in a matter of 20 years. One of his successful moves was to purchase the German marks during the Reagan presidency in 1980 when DEM was highly undervalued. This turned out to be a smart investment, as from 1985 to 1987 the German currency made some significant gains against the US dollar, with Marcus earning millions of dollars in the process.

Richard Dennis

Richard Dennis began trading with a humble beginning, borrowing just $2,000 from his relatives to get started. It is likely that at that time, many people would not have expected him to become a millionaire. However, well within 10 years, he did manage to turn this initial investment into $200 million, earning his rightful place among the greatest Forex traders in the world.

According to his trading philosophy, two mandatory things in Forex trading are discipline and consistency.

Bruce Kovner

The case of Bruce Konver is very interesting. Even nowadays, many people believe that for a person to become a successful FX trader, one has to inherit a lot of money, or at least have a specific financial academic education. However, Kovner did not belong to any of those categories.

He was just a taxi driver and supported himself with this job. He managed to save up some money to start trading in the Foreign exchange market. Surprisingly, after years of trading, he became one of the richest day traders in the world, with his net worth exceeding $1 billion today. His example shows that with the knowledge and determination, regardless of one’s background, everyone has a chance to become one of the best traders in the world.

Axel Merk

Axel Merk is a president and CIO of the investment company that Axel created himself in 1994, called Merk Investments. Merk is originally from Switzerland. He first started trading back in college, where he was managing funds for his friends.

In 2001, he moved his business to the United States in the State of California where he created the ‘hard currency fund’ which aims to benefit from the long term Forex trends. Throughout his career, Axel made many accurate predictions about future market movements. For example, he predicted the substantial rise of the Euro exchange rate from late 2012 to early 2014. He also predicted the massive expansion of the gold price during 2019-2020. He is one of the strongest advocates of the theory that the real interest rates are one of the most important factors which determine the Forex exchange rate movements. Merk also believes that budget deficits can have a sizable long term impact on the Forex market.

Jim Simons

Jim is the last trader in our top 10 Forex traders list. James is known as the Quant King. In 1982, he created a money management fund called Renaissance technologies. Jim is a mathematician by profession, but the source of his strength in the trading world comes from elsewhere. Jim is a great manager. He has created a team of amazing professionals that help him run the company. In 2009, he retired from his company, but remains as a chairman. Renaissance technologies hire people from various backgrounds such as traders, coders, mathematicians, physicists, etc. The company is highly dependent on using trading algorithms and automation.

Top Forex traders - Key Takeaways

Despite the popular misconception, one does not have to have a huge amount of trading capital at hand, or an advanced academic financial education in order to become a successful Forex trader. As we have seen above, there are some of the richest traders who came from very humble beginnings and achieved success.
Every successful trader in the world has his or her unique methods and strategies for trading. However, nearly all of them maintain a disciplined and consistent approach to trading, rather than making decisions based on emotions. Successful traders learn from their own mistakes fast and are good at risk management.

FAQ: Forex Successful Traders

What was the trading capital of some of those successful traders when they first started trading?

Many people expect that those traders who now have a net worth of billions of dollars had large sums of money to begin with. Now, this might be true with some market participants, it is not always the case.

As we have seen above, there are even those successful traders who have started with just $2,000, but eventually did manage to turn that initial investment into millions of dollars.

However, this does not mean that this is an easy task to achieve, or it can be done within a short period of time. In fact, for those top Forex traders in the world who managed to do it, it took at least 10 or more years to achieve that.

What created the opportunity for George Soros to profit from the collapse of the pound?

As the BBC documentary ‘Black Wednesday’ demonstrates in the interviews, some former British cabinet ministers believe that the GBP/DEM exchange rate which was chosen by the government at which to join the European Exchange Rate Mechanism, 2.95, was too high.

In fact, the officials at the Bundesbank were of the same opinion and requested a negotiation meeting with the representatives of the British government to settle the matter. Therefore, if those negotiations took place, then it is highly likely that the exchange agreed upon would be much lower than 2.95. Consequently, it would be much easier to sustain the peg in place and likely the United Kingdom would never be forced out of the ERM by the market forces.

However, this was not the case. The UK government simply decided to announce the new policy without any consultations with the Bundesbank. So this was the first link in the chain of events that led to Black Wednesday.

The second factor was the fact that as the Bundesbank increased its interest rates, the UK government kept the rates unchanged. It is not surprising that this made the German Mark more attractive for investors and traders, compared to the British pound. This, in turn, put strong downward pressure on the GBP/DEM exchange rate.

Finally, there was an offer on the table from the German Bundesbank addressed to the Italian and British governments. The deal offered a 0.25% cut in the German interest rates, in exchange for the UK and Italy revising the exchange rate at which their currencies were pegged to ERM downwards.

There was a reasonable chance that this might have solved the crisis, at least for the foreseeable future. However, the offer, for whatever reason, was rejected.

Faced with this reality, George Soros concluded that the devaluation of the pound was inevitable, the prediction of which turned out to be true. As Soros himself mentioned in his interview, the two emergency rate hikes by the British government during the Black Wednesday were taken by the markets as an act of desperation and failed to help the British pound.

As a result of those events, as the official figures suggest, the Bank of England has lost £3.3 billion, while the Quantum Fund has earned more than $1 billion in profits.

Why do some traders with large trading capital fail in Forex trading?

Investing a large amount of capital does give traders an opportunity to earn higher payouts. However, this does not mean that it is always guaranteed. The fact of the matter is that people with large trading capital can also fail in Forex trading due to a number of reasons.

Firstly, some traders do not have proper risk management strategies. By not having stop-loss orders in place, the market participants are risking their entire position being wiped out by the adverse market movements.

Another major error some traders make is the fact that they do not set a proper risk/reward ratio for their trades. As a result, it can happen that they lose more money with losing trades, compared to what they gain with winning positions.

What are the main risk management principles, used by the richest Forex traders?

The most important risk management principle shared by the majority of the world’s successful traders mentioned above is to minimize losses with losing trades and maximize gains with the winning trades. This approach can help even those traders whose ratio of winning trades is below 50%.

Another significant principle for those traders is to gather as much information as possible about the technical and fundamental factors influencing the exchange rates. This type of analysis can help traders to make correct trades most of the time.

How does the Axel Merk’s Hard Currency Fund Operate?

According to the official fact sheet and prospectus of the Axel Merk’s Hard Currency Fund, the managers aim to benefit from the potential appreciation of the hard currencies against the US dollar.

In this case, the hard currencies are defined as currencies that are backed by the sound monetary policy, which focuses on maintaining the price stability. Here, it is worth noting that the actual composition of the basket of hard currencies changes from time to time, in accordance with the decisions of the Fund’s management.

However, as of 30 June 2020, the fund owns assets in the following currencies: the Euro (EUR), the Norwegian Krone (NOK), the Swiss Krona (SEK), the British Pound (GBP), the Australian dollar (AUD), the New Zealand dollar (NZD), the Japanese yen (JPY) and the Canadian dollar (CAD). The fund also has some gold holdings.

How to become one of the top 50 Forex traders in the world?

The best Forex brokers have the ability to manage large trading balance. It's much more difficult to manage a million than it is to manage $10k. To be able to trade profitably, it's important to think in terms of percentage points and not in terms of sheer numbers when trading. Top ten Forex traders in the world that we discussed got there by learning how to manage their risks. There's two tested and true ways to become a top Forex trader and earn lots of money: you either manage other people's money or reinvest your own money. In both scenarios, learning how to manage your risks is essential.

What are the traits of the best Forex traders?

The best Forex traders learn from their own mistakes fast. They are good at managing risks. In addition, the best Forex traders are hard workers. Searching and developing trading strategies that best suits your personality takes a lot of work. Moreover, the best Forex traders do not rush. They take time to find the best opportunities and use compounding or attract investors for higher returns.