Top ten forex millionaires in the world
The forex or the foreign exchange markets are one of the largest in the world they produced many millionaires. The markets which deals with currency transactions across the globe, accounts for nearly five trillion dollars a day.
While most of these transactions are conducted by the interbank markets, the forex markets are also widely used by speculators or hedgers. The speculative traders and hedgers take advantage of the volatility in the currency markets. The ultimate goal is of course to make profits as prices fluctuate.
While most of the currency markets center around the U.S. dollar, which is the world’s reserve currency, other currencies include the euro, yen, Swiss franc, British pound to name a few.
Many of the biggest names in forex have amassed fortunes by speculating in such currencies since time immemorial. Of course, there is no record book that keeps records of how much the top ten forex traders in the world make.
Every now and then, the mainstream media reports on such traders who have literally earned fortunes overnight. One of the main reasons for this is not because such traders have a proprietary algorithm.
On the contrary, they are patient and do their homework and wait for the right time to enter and exit a trade. This runs in an opposite view compared to how many of the retail forex traders trade. Many traders chase profits, they end up giving back whatever profits they made.
In recent times, you will find that there are many so called “self-proclaimed” forex millionaires enticing you to learn their trading system that made them rich. Quite often, you will find such ads on Youtube or Facebook or Google.
In reality, really successful forex traders keep a low profile, for obvious reasons. In this article about the top 10 forex millionaires, you will find that not single one of them advertises their riches and compels you to buy their trading course.
There is a difference, and thus, this article does not focus on the so-called fake forex millionaires but the real ones who made huge profits. Of course, one thing to bear in mind is that these forex millionaires did not become rich by trading with an account of $10,000 or even $100,000.
Some invested and risked a lot more, while a few other top forex traders made money by continuously growing their income over a period of time, including reinvesting the profits that they made.
If you are dying to know who the richest forex trader in the world is, then without much further ado, let’s look at the top 10 forex millionaires.
1 George Soros – The man who broke the Bank of England
George Soros is no doubt the first name that comes to the mind. Born in Budapest, Hungary, Schwarts Gyorgy changed his surname to Soros in order to hide their Jewish identity during the Nazi invasion of Europe.
Soros, along with his parents emigrated to Switzerland in 1946 to escape the Soviet occupation and later moved to England. Soros studied at the London School of Economics and Political science. In 1952, he graduated in Philosophy and started his financial career in 1954.
Soros held his first job, working for a London bank called Singer and Friedlander. A few years later, after working at various other banks and financial companies, he founded his fund, called the Soros Fund Management.
Since its inception, the Soros fund as its commonly known as today is estimated to have generated over 40 billion in revenue. The success led to George Soros creating another fund called the Quantum fund. This fund was managed by his children and this is where Soros primarily traded.
While Soros did make a name for himself, he shot to worldwide fame in 1992, which is now famously referred to as breaking the Bank of England. Soros made his fortune, by simply taking a short position to the tune of 10 billion pounds.
Soros basically bet against the United Kingdom and the Bank of England which got him profits of over one billion dollars within a day. Thus, it is not surprising why that Soros holds the record to be the only person in history to date to generate such massive returns in a single trading day.
Soros earned the profits betting that the United Kingdom would withdraw from the European Exchange Rate Mechanism. This was in the early stages of the creation of the euro.
Back then, all countries that eventually wanted to switch to the euro had to peg their currencies to the Deutsche mark. The UK’s inability to keep the sterling’s exchange rate pegged to the Deutsche mark eventually led the UK government, under the leadership of John Major as the PM, and thus the Bank of England to withdraw from the exchange rate mechanism.
Robin Leigh-Pemberton was the then governor of the Bank of England, serving the term from 1983 – 1993.
As a result, the consequences of pulling out of the ERM saw the pound lose its value dramatically. Soros, positioned himself against the pound and reaped massive profits as a result.
The day was September 16, 1992 and thus it earned the nick name Black Wednesday in the United Kingdom.
2 Stanley Druckenmiller – A Soros prodigy
Stanley Druckenmiller is perhaps synonymous with the name George Soros. Druckenmiller also ranks at the top forex millionaires (or perhaps billionaires) because he was hired by Soros.
Druckenmiller was hired by Soros as a fund manager for the Quantum fund. He was the lead portfolio manager at the fund since 1988. Unlike Soros who was busy betting on the fall of the pound, Druckenmiller focused his attention to the German Deutsche mark currency.
Over a period of time and before the fall of the Berlin wall, Druckenmiller kept increasing his stake in the Deutsche mark, betting that it would rise. Towards the climax, he had over 2 billion invested and managed to generate 1 billion in profits.
The Deutsche mark was turning volatile towards 1980 due to the political uncertainty and talks about reunification of Germany. By constantly monitoring the developments, Druckenmiller concluded that the Deutsche mark was undervalued and thus increased his stakes.
Soon after, Druckenmiller and Soros parted ways. Druckenmiller was born in the United States and came from humble beginnings. His current net worth is estimated to be about $4.7 billion and currently manages his family fund.
3 Andrew Krieger – The kiwi currency raid
If Soros is known as the man who broke the Bank of England, then Andrew Krieger is his counterpart from New Zealand. Krieger, a trader from Bankers Trust profited from betting against the New Zealand dollar or the kiwi.
Krieger graduated from the Wharton School of Business and started working with Salomon Brothers. The firm is famous for another great personality, Jordan Belfort, on whom the movie Wolf of Wallstreet was made.
Krieger quickly grew his reputation as an acute businessman and this eventually led his company, Bankers Trust to reward him with an increase in his capital limits to $700 million dollars.
Around the time, this was seen as a big increase when the average capital for limited to just $50 million.
Armed with his new bankroll, Krieger capitalized on a crisis in October 19th 1987. After the world markets panicked following steep declines in the global financial markets, Krieger started to take positions in the New Zealand dollar.
The basic premise for his trade was that the currency was overvalued, thus making for himself an opportunity to short sell the currency.
By leveraging his capital four hundred times, he started to short sell the NZD. The move was aggressive and resulted in him making 300 million dollars in profits for his firm, Bankers Trust.
Eventually Krieger left the company, disheartened after receiving just a 1% bonus to the tune of $3 million.
4 Bill Lipschutz – From broke to back on top
The story of Bill Lipschutz is one that many traders have experienced. Born in 1956 in New York, Lipshutz attended Cornell university and graduated with a Bachelors degree in fine arts.
Thereafter, Lipschutz enrolled himself in an MBA program studying finance at the Johnson School of Management. During his early years, Lipshutz met with a windfall.
Inheriting 12,000 dollars from his gradmother’s death, Lipschutz started to trade and at one point managed to make for himself close to $250,000. But he quickly lost all that money after a bad investment decision.
Not one to stay down after a setback, Lipschutz attended an investment training program conducted by Salomon brothers and thereafter he joined the firm.
After learning from his mistakes and realizing the importance of risk management, Lipschutz became the head trader at Salomon brothers. He started to make a steady $300 million in profits for the firm for six consecutive years.
5 Bruce Kovner – The gamble that paid off
Bruce Kovner is a name that might ring any bells, but his story is one that is of taking risks and getting paid for it. At the age of 32, he used $3000 from his credit card and purchased Soybean futures.
This trade generated Kovner over $40,000 in profits at one point. He however lost some of the profits and ended with $23,000 in cash in his hand. Kovner also learnt about the importance of risk management the hard way.
He later joined the Commodities corporation and turned his trading around, generating millions of dollars for the company. This soon earned him the nick name of being a sober trader.
Following his success, Kovner went on to found Caxton Corporation which later became Caxton Associates. An asset management company, Caxton Associates has a diversified approach and invests in forex, interest rate swaps, commodities and equities.
At one point, Kovner’s firm generated over $14 billion in profits for its clients.
6 Michael Marcus – The man who gave it all up
Michael Marcus is another name from the Commodities Corporation. He was the main currency trader at the firm in his time. Marcus learned about trading and managing money from the famous Ed Seykota.
Marcus and Seykota met when Seykota was working as an analyst at the same firm. In his time, Marcus had positions in the Deutsche mark to the tune of close to 300 million dollars. This was around the time of the Regan administration.
Marcus quickly earned the reputation of being the largest currency trader. Marcus was the godfather for Bruce Kovner whom we covered previously. Kovner was hired by Marcus and was taught the ins and outs of risk management and trading.
After his personal life fell apart, Marcus believed that it was because he was too involved with the markets. He said that he had to know what was going on during various trading sessions which left him at his work nearly round the clock.
Marcus retired from trading, especially forex after this personal incident.
7 Paul Tudor Jones – Calling the 1987 crash
Paul Tudor Jones, is a name that is quite famous. This was of course because he famously predicted the 1987 crash of the stock markets, dubbed Black Monday.
His success eventually led to the making of the film, Trader: The documentary in 1987 which portrays how he was able to predict the stock market bust. Tudor Jones is a primarily equities trader.
Tudor and Peter Borish, his second in command basically mapped the stock market in the run up to 1987 and noticed similar patterns that led to the market crash in 1929.
As a result, he placed large bets and managed to make a profit from it.
He works as a hedge fund manager is known the world over for his knowledge about the macro-economics.
Jones bet on various markets including stocks, interest rates and foreign exchange markets that got him his fame. His famous bet against the Japanese yen and the Tokyo stock exchange generated him a 14.3% return for his hedge fund.
Paul Tudor Jones founded his hedge fund firm, Tudor Investment Corporation in 1980 and created other firms such as Tudor group and diversified his trading into currencies, equities, fixed income and commodities.
Besides being an active trader, Tudor Jones is also a well-known philanthropist. He was also a director at the Futures industry association and helped to shape and create the education arm for the institute.
8 Joe Lewis – Another Soros but from behind the scenes
Joe Lewis is famous for steadily growing his income trading forex. Over a period of time, as his capital limits started to grow, he was also one of the traders that reaped benefits from the Bank of England in 1992.
Lewis was born in London and stopped his studies to work for a catering company owned by his father. After taking control of the company, he managed to oversee the business expand.
A few years later, he sold his family inherited business and made the choice of moving to the Bahamas due to its low tax regime. Settling down in the Bahamas, Lewis focused his attention to the currency markets.
By gradually trading and slowly increasing his income, he managed to build a large enough capital which allowed him to reap the rewards from the famous trade that pulled George Soros to international fame.
Rumor has it that Lewis in fact made much bigger profits than Soros, but there is no supporting evidence for it. But Lewis shot to fame also came with his bet on the Mexican peso.
In 1994 - 1995, he bet against the peso. The country of Mexico was in deep financial crisis due to international pressure and quickly grew up an enormous deficit.
He carefully studied the economy and noticed that the government was handling the situation rather badly. He quickly saw an opportunity in the Mexican peso and sold short.
His bet worked out and he managed to turn another big trade for himself.
9 Urs Schwarzenbach
Urs Schwarzenbach was Swiss and worked at the Swiss Bank Corporation, in its financial department. As his first job, he joined the foreign exchange department at the firm.
A few years later, Schwarzenbach was sent to London to represent his company. His father gave him 10,000 Swiss francs as a gift during his move. Schwarzenbach used his money and with leverage he managed to make his first million in the currency markets.
After becoming a millionaire and after being encouraged by his new found success, he founded his company, Intex Exchange. A few years into operation, Schwarzenbach’s firm started to generate huge returns.
His firm was able to make profits, as it was largely attributed to Schwarzenbach’s keen eye for being cautious. The fact that he managed to make such huge profits despite being a cautious trader says a lot.
His approach, according to some reports is said to take strategic positions. Unlike banks at the time who invest millions of dollars on a trade and exit the market with small profit. This different strategy to trading managed to make Schwarzenbach a successful trader.
Although it is said that Schwarzenbach does take risks when he doesn’t have anyone to report his positions to. He is known to keep a low profit and according to the few interviews he has given, Schwarzenbach said that he prefers to keep it this way.
10 Michael Steinhardt – The power of compounding
When it comes to compounding, people often think of Warren Buffet, one of the greatest investors of our times. However, there are many more investors and traders who have managed to make a healthy profit by simply using the power of compounding.
Compounding or compound interest is nothing but reinvesting the profits generated from your investments back into the investment. This method leaders to higher profits compared to taking out the profits at regular intervals.
Michael Steinhardt is a hedge fund manager and a philanthropist. It was his father who first introduced Steinhardt into the world of finance. His father gave him some money to invest in the stock exchange so that it would give him the capital needed to start his career as an investor.
Over the years as his career progressed, Steinhardt made a record yield of 24% compounded annual growth rate consistently for 28 years. To this day, it is a record that stands out on Wall Street.
Steinhardt managed to make this return despite investing in multiple asset classes, ranging from currencies to stocks and bonds. His net worth is estimated to be over one billion.
Who is the richest forex trader in the world?
No one can really or accurately say who is the richest millionaire in the world. In fact the term itself is incorrect as anyone who has achieved big success in the currency markets is a billionaire and not a millionaire.
As mentioned, many traders tend to keep a low profile and not all amounts that are reported are accurate or audited. Therefore, it is difficult to predict who is the richest forex trader in the world.
The main takeaway from this article is that you can see a pattern. Successful traders are confident. They ensure that they take their time to study the markets and know when to wait for the right trading opportunity.
In this article, you have examples of traders who have made profits by using leverage. While we know that leverage can be risky, the difference here has been that the risks were calculated risks and not just a gamble.
Every forex trader aims to be in this top ten list of the best forex traders in the world. Getting to this is something that will take time efforts and of course being well capitalized.
At the end of the day, forex trading or trading any types of financial markets is risky. Therefore, it is up to the reader to understand these risks first before they start to invest in the markets.
It is not all the time that you can become rich overnight by trading forex, especially in this day and age. Therefore, it is best to exercise caution and have realistic expectations.