Every trader has a different story. All have their ups and downs, but what they all share is the drive to get up and succeed after all. The moral of every trading success story is the same: it’s not over unless you decide to give up yourself. Hopefully, 2022 will add new names to the list of top traders, and one of them is yours!
1. Bill Lipschutz: Prototype of a Modern Forex Trader
He claims to have increased his account from $12,000 (inherited from his grandmother) to $250,000, with proof! However, Bill Lipschutz loses all of his capital on a bad trade, which will leave a lasting mark on the pre-eminence of good risk management over profits.
In 1982, he joined Salomon Brothers while pursuing an MBA.
The nickname Sultan of Forex, Bill Lipschutz doesn’t owe it to chance. Looking back over the years, observers agree to recognize him as the prototype of the modern Forex trader.
At Salomon Brothers, he helped set up a whole new department for forex trading. Despite his lack of experience, Lipschutz made hundreds of millions of dollars in profits for them in the 1980s.
With 16 months in a row in positive, it was the source of more than 50% of the volume of currency options on the Philadelphia Stock Exchange!
In 1985, he was earning $300 million a year for Salomon Brothers. He was the principal trader for the company’s foreign exchange account until his departure in 1990. After that, he became the CEO of North Tower Group, a subsidiary of Merrill Lynch Corporation. In 1995, he co-founded Hathersage Capital Management with his classmates from Cornell. The firm is a global macro manager specializing in… currencies.
With his early failures, Lipschutz helped popularize the risk/reward ratio (RRR or Risk-Reward Ratio). He also popularized the limit of 2% of the capital used in a single transaction.
2. Nassim Taleb: A Black Market Swan
This trader created one of the most controversial theories in the world of trading – the theory of “black signs” (Black Swan), or the theory of events that seem extremely unlikely.
Born in Lebanon, in a family of Greek Orthodox believers, Taleb started out as a trader after graduating from the University of Paris. The more he studied statistics, the more he was convinced that the whole financial system was a powder keg ready to explode.
As Taleb’s strategy as a trader is to protect investors from crises while reaping the rewards of rare events, his career has been punctuated by several jackpots. Like the one on Black Monday, October 19, 1987: After the Dow Jones Industrial Average fell 22.6%, Taleb made a profit of $40 million.
3. Richard Dennis: Prince of the Pit
Dennis’ story is the kind of legend that can still inspire future traders immensely. Surprisingly wealthy, a genius and a pioneer in commodity trading – that’s how Richard Dennis is known.
He was born south of Chicago into a fairly poor Irish family. He started out as an order executor on the Chicago Mercantile Exchange when he was 17 – and he converted a $1,600 loan to over $200 million in about ten years and traded commodities basicly at the age of 23.
He is famous for hiring and training a group of people known as the “Turtles” for two weeks. Five years later, his turtles reportedly made a total profit of over $175 million.
Dennis was a trend trader. He enjoyed finding a trend and placing more and more trades in the direction of the trend with greater and greater leverage – so that in lucky cases, he would make as much money as possible.
When you have a position, you place it for a reason, and you have to hold it until the reason no longer exists.” – Richard Dennis