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Turn Your Life Around: Lessons from the Trading Legends
Legends will always be legends, and the trading world is no exception. That’s why today we’re focusing on the trading legends that have left an indelible mark on the markets and provide traders with a big dose of inspiration.
We’re starting off with one of our favorite trading legends – Jesse Livermore. He is one of the most awe-inspiring traders of all time but unfortunately also one of the most unappreciated. In a nutshell, he was an American Stock trader who traded by himself, using only his own funds and strategies.
Livermore was trading at the beginning of the 20th century. So, he didn’t have access to resources like modern-day charts and graphs that we all take for granted as traders today. His strategy was simple; track all the stocks’ patterns in a ledger. He focused on finding and buying the strongest stocks in the bull market and shorting the weak stocks in the bear markets. What’s more, he believed it was important not to focus on too many stocks but instead focus on the strongest and the weakest. These would be the stocks that are more likely to move and therefore offer more potential.
Wealth Standard Xchange Takeaway – Livermore started with nothing and made millions by following a simple strategy.
Next up is the iconic George Soros. Soros is an investor and philanthropist who also happen to be the 56th richest person in America.
Soros is a Hungarian who lived through World War II and subsequently emigrated to England where he attended the London School of Economics. He graduated after 4 years and proceeded to work for a London bank. From there, he moved to the USA for a position at the New York-based firm F.M Mayer. He also worked with many Wall Street firms as a trader and analyst. The tipping point in his career came while he was managing his first offshore fund First Eagle Fund, at Arnold and S. Bleichroeder. This was the first step that led him to become the man he is today.
He also established the charitable organization Open Society Foundation and gave away billions to sustain its work around the world.
Wealth Standard Xchange Takeaway – No matter where you come from you have the power to change your future.
Ed Seykota is a commodities trader. In simple terms, a commodities trader is a business or an individual that focuses on physical investments such as gold, oil, or agricultural products. Seykota is known for keeping a low profile, but many claims that he is the market wizard par excellence. Indeed, he developed one of the first commercialized trading systems for client money management in the futures market. He then went on to work on his own.
While Seykota’s area of specialization is not currencies, he can still teach us some very valuable lessons. Firstly, cut your losses because as a trader you must protect your capital, money comes second. Secondly, ride the trend or trend trading, that is, riding the upward trend or downward trend in investment. Thirdly, keep your bets small because if you risk too much on one trade greed and fear will start to creep in. Fourth, make sure to follow the rules, trading rules are critical to your success. Finally, it’s also important to know when to break the rules. Seykota explains this quite eloquently when he says “Sometimes I trade entirely off the mechanical part, sometimes I override the signals based on strong feelings, and sometimes I just quit altogether. If I didn’t allow myself the freedom to discharge my creative side, it might build up to some kind of blowout. Striking a workable ecology seems to promote trading longevity, which is one key to success.”
Wealth Standard Xchange Takeaway – 1) cut your losses 2) ride the trend or trend trading 3) keep your bets small 4) make sure to follow the rules 5) know when to break the rules.
We couldn’t exclude the foreign exchange market trader Bill Lipschutz from this round-up. Throughout his junior high school days Lipschutz was a maths enthusiast and this is what led him down the forex trading path. While attending university, Lipschutz turned a $12,000 inheritance from his grandmother into $250,000. However, the success was short-lived since he lost all his risk capital with one bad move.
After this, Lipschutz became determined to not let something like this happen again. In fact, this proved to be a valuable learning experience that guided his future investments. While he was working for Salamon Brothers he and four other team members came up with a plan to learn all about currency trading. After this, Lipschutz went on to focus on exchange-traded and over-the-counter foreign exchange options markets.
We particularly like this no-nonsense advice from this epic trader, “Always understand the risk/reward of the trade as it now stands, not as it existed when you put the position on. Some people say, “I was only playing with the market’s money.” That’s the most ridiculous thing I ever heard.”
Wealth Standard Xchange Takeaway – Never give up and learn from your failures since they will only make you stronger.
Last but no means least, we’re talking about Kathy Lien. Lien started to work in the forex market at the astonishingly young age of 14 and is now a managing director and founding partner of BKForex. Doubtlessly, she is an inspiration to all traders but particularly to the female traders that are consolidating their trading career.
Kathy enjoys the freedom of being her own boss and the possibility to test new concepts without the need for approval. She is also an internationally published bestselling author with titles like “Day Trading and Swing Trading the Currency Market”, “The Little Book of Currency Trading“, and “Millionaire Traders: How Everyday People Beat Wall Street at its Own Game”
One thing that Kathy highlights to all the female traders who want to succeed in the forex trading industry is; don’t let the glass ceiling restrict or block you from going where you want to go in life and in your career.
Wealth Standard Xchange Takeaway – Don’t let that glass ceiling stop you from succeeding.
In their own way, these trading legends have all left an impact on the trading world and provided us with inspirational blueprints that guide our own journeys. These legends show us that starting small is not necessarily a drawback and being different may in reality be your biggest strength. So, don’t let doubt hinder you from starting a fulfilling trading journey, contact our helpful support team today.