The Most Successful Currency Trades Ever

Forex trading is a unique but effective method of investing used by advanced investors the world over. Depending on whether a currency trader believes different foreign currencies will rise or fall in value, they can place call/put options or other forwards to solidify the value of a trade for a period, even during a market shift.

Over the course of history, some especially advanced forex traders have made immense fortunes off a single trade. The risks they took were significant, but they paid off. Some of these traders have made $1 billion from a single trade, built $200 million dollar empires, and virtually shut down government banks. Check out the top four most successful currency trades ever:

1. George Soros

George Soros is the biggest name when people discuss successful forex trades. As a speculator, he ran a large fund management operation – Soros Fund Management – since the 1970s. In the early 1990s, Soros was one of many investors who began to take short positions against the British pound. Ultimately, Britain elevated interest rates in a last-ditch attempt to attract investors and keep the value of the pound consistent.

However, their efforts failed, leaving the country with incredibly high interest rates and out of control inflation. Ultimately, Britain withdrew from the ERM (Exchange Rate Mechanism). When this all happened in 1992, George Soros had short sold $10 billion worth of Pound sterling for a $1 billion profit. His incredible profit ultimately “broke” the Bank of England, but the country made it out of their financial downfall and emerged a stronger nation as a result. The event is often referenced as “Black Wednesday,” and is famous throughout the forex industry.

2. Andrew Krieger

Another “trading immortal” that is well-known in the forex industry is none other than Andrew (Andy) Krieger. Krieger was an incredibly advanced trader, and as such he was given a $700 million trading limit by his employer, Bankers Trust, in the late 1980’s. This was incredibly uncommon, as most industry traders were capped at a $50 million trade limit.

On October 19, 1987, the markets experienced a world-renowned crash, known today as Black Monday. While other traders were scrambling, Krieger had an idea. He believed that the New Zeeland dollar was vulnerable, and given the vast trading limit at his disposal, he started leveraging currency options. His short options were leveraged at an approximate rate of 400:1. When his predictions came true, he made $300 million for Bankers Trust and received $3 million personally.

3. Stanley Druckenmiller

Stanley Druckenmiller made millions while working for George Soros’ Quantum Fund. He made two long bets by buying German bonds and British stocks, as Britain’s lending rates were cut and more people were driven to purchase German bonds as their stocks were showing slow growth. This all took place during the same time that George Soros had bet against the pound and made $1 billion, forcing Britain to withdraw from the ERM.

Druckenmiller was so confident in he and Soros’s predictions that he made these risky long bets in the mark, and it paid off. He added significant profit in addition to the $1 billion that Soros’s betting made. After he and Soros turned such a significant profit, Druckenmiller went on to successfully own a hedge fund management organization and actively participate in philanthropic endeavors.

4. Bill Lipschutz

Bill Lipschutz had a rocky start to his career but learned from the early ups and downs of his forex trading experiences and went on to become a forex legend. At the beginning of his career, Lipschutz had built his solo portfolio to $250,000, but he lost it all after making a single bad decision based on a market turn. In some ways, this “trade” can be counted as the most successful trade of all time, as Lipschutz came out of it stronger than ever and quickly became (arguably) the most successful trader of all time.

He has built a $200 million trading company and is known for his strict trading ration rules, working hard, and focusing on the emotion behind market shifts. This was a new concept, as most traders are technical thinkers. Lipschutz believes that understanding the emotional motivation behind shifts and the overall market perception should largely influence his (and everyone’s) trading positions. When Lipschutz first started enacting these trade rules, he was working for Salomon Brothers in the late 1980’s. He quickly started making $300 million per year from a few key trades.

Final Notes

These four greats have truly rocked the forex trading industry in more ways than one, namely with their big-moment trades that raked in the profits or caused a turning point in their esteemed careers. Their innovative thinking and interesting departures from traditional trading strategies each added to the industry in such a positive way and inspired traders everywhere.