George Soros is a well-known name in the world of currency trading, where he is known for his exceptional skills and knowledge. He has become a legend among traders, and in the forex market, his name is synonymous with success and making money.
In this guide, we will talk about who Mr. Soros is, explain his superior trading skills, and, most importantly, learn how to improve your trading skills based on his trading methods.
Who Is Soros, and Where Did He Start?
George Soros is a famous man who played a crucial role in history when he broke the Bank of England. This renowned man rose to prominence in 1992 when he made over a billion dollars in profit by competently short-selling the British pound sterling. As co-founder and manager of the renowned foreign hedge fund Quantum Endowment Fund, he controls a staggering $27 billion in assets.
As a young Jew in Hungary during the Nazi occupation in 1944, Mr. Soros’s growing up years were difficult. He then moved to England to study at the prestigious London School of Economics and pursue his academic goals.
After graduation, he moved to the United States in 1956 to start working as a stockbroker. Soros is a passionate investor, philanthropist, and supporter of democratic ideals. He also knows a lot about trading, investing, and philosophy.
What can we learn from this forex trader with years of experience that can efficiently be utilized? Let’s discuss what’s happening and get to the bottom.
The Trading Philosophy of Mr. Soros
George Soros mainly speculates on the forex market in the short term. He bets big with much-borrowed money to guess how the financial markets will move. He runs a well-known hedge fund known for its global macroeconomic strategy.
This strategy includes large one-sided bets on changes in foreign exchange rates, commodity prices, stocks, fixed-income securities, derivatives, and other financial instruments based on macroeconomic assessments.
George Soros’ Trading Strategies and Investment Philosophy
The first thing Mr. Soros said brings us to the critical conclusion of how irrelevant the level of a person’s success is. The basic idea behind Forex trading is that you can make money even if you don’t win most of your trades.
How? By developing a tremendous risk-reward plan. It is that simple. If your trading plan does not include a risk-to-reward ratio of at least 2:1, making money in the forex market will be complex. Trading can be profitable even if you only win 40% of the time, which means you lose 60%.
The most important thing to know is that as the reward-to-risk ratio per trade increases, the number of successful transactions required to earn decreases.
Trader’s task is to choose successful assets and make only a few transactions. This is easier said than done, especially without proper preparation.
We usually have to deal with the consequences when we go against the market’s direction in Forex trading. Turning points in the market are the only time you can make money.
However, it should be noted that the movements are not eternal but have a cyclical nature. Trend reversals can be sudden and significant, especially at critical chart levels or major inflection points. Experienced traders take trades based on significant chart levels, carefully watching for clear price action signals or entering the market at stations without prior confirmation.
Soros say that the market’s future is uncertain and difficult to predict. If we don’t want to trade based on emotion or thinking, we can expect a call by looking into the future; we must change based on that fact.
In fact, by analyzing price action and trading well, you can create a powerful trading method that will give you high-probability indications of when to get in and out of the market. Many things affect daily prices in the foreign exchange market, making it impossible to know what will happen with any trade.
We must control our entry price, risk management, placement of stop losses and targets, trading capital, and most importantly, our psychology and cognitive biases. We have no control over anything outside of these parameters in the forex market. If you try to influence the market, you will permanently lose.
Soros succeeded by admitting his mistakes, accepting his shortcomings, and correcting them. As an experienced forex broker, he knew how to quickly recognize bad trades and get out of them at the right time.
In foreign exchange (Forex), you must admit your shortcomings and mistakes. Trading is not for the faint of heart. As a beginner trader, you must understand that making wrong predictions is a normal part of the job.
Therefore, if you don’t want to lose a lot of money in trading, you must accept and learn from such situations.
Mr. Soros’ first financial success came by going against the general opinion of the crowd. He bet the British pound would fall in value, although highly valued, seemed strong, and most market participants were positive.
Soros was able to do this because he was able to analyze the market and read the charts. And all this is worth learning for every trader, regardless of the level of his training and experience.