How George soros made his billions

4000% is respectable, I guess! I wonder when George will have enough money to retire, just like Jim!

Two investment legends, no doubt there.

description of this strategy is very good.... it's about trading corrections and help provide right valuation from market.

actually we can draw same conclusion if assuming forex is negative sum game (excluding broker)...
and think how broker & bucketshop that play against trader can consistantly profit.... in this way we can learn it.
=> profit from other people's loss (mistakes) and find those high probability fail people and find bigger mistakes they have big stakes in (and thus unrational)

for example.

chances to short:
identify a one-direction market that is over-heated and lack of a tool and presence to short,
and everyone is unreasonably positive/long at their position,
and find or invent a way to short it...
(may need to short a correlated market that allowes market tools of shorting)

chances to long:
or identify a one-direction market is is over-pessimated and lack of a tool to short to profit, so people's pessi have a loop to create more loss.
and everyone is fearful about a well calculated ROI that obviously gives advantange over other market options... and fears to take it.
and find or invest a way to safely long it...
(find a market tool that limits loss to acceptable; or hedge a correlated market that is over-valued, so when overall markets go up or down - we don't care, we just profit on correction of under-value)

entry:
always use a limit order that has some spreads away from most popular deal prices,
meaning when participants are mad, they eats deep into buy3 or sell4 using market orders and returns a spreads benefit to you, compared with peace market deal price.

position sizing:
always use a safe position that we can hold forever / on whatever market movement...
also some market tool, ... when holding for ~5yrs that position gives a guaranteed no-loss of original invested money... so we're in peace holding it everyday.
meaning we're always the calmest in the market, while others using high leverage and trade too frequently consistantly cuts loss on every 1% market random moves... they cannot stay in market long enough for the anticipated correction to arrive... before that they already cut the loss and leave due to some market randomness.

(a little more about why position size matters:
if goal #1 of safe investment is not to have big loss on major deals...
then be able to staying in market for 5yr long definitely have 100x bigger chance to beat even
than people that can only afford 1% market moves before margin call - say using position size=100x acc...

in stocks we often hear sayings that 'whose who finally survive in the market win',
because in long long term, there is always a price higher than now if market is not too much over-valued...
so being able to wait for long time gives an advantage for correction traders to win...

even if we're 90% sure of an outcome, we shouldn't be leveraged I believe
=> only leverage if the win is 99% guarateed by calculation and data
and chance of loss and loss size is well controlled by calculations over long term... like <1% chance of loss and <2% of acc size loss.

=>> ideal trades a correction trader take is always 100% sure win and 0 loss. (chances has to harvest hard in systematic defects of human systems though)
this allow us to execute mechanically without emotionally tied to it and make human mistakes due to pressure...
this also allows a simple exit strategy, if the formula predicts 0 loss from entry to exit, then showing a position in red is a clear signal to exit a mistake entry without hesitation and without a goal for profit anymore.)

exit:
when anticipated calculation is proved wrong by facts later released, admit mistakes and leave the market... one big example on this is trading rumors which constantly proven wrong.
also, find a good entry that allows stay in market a short duration, before quick exit after correction happen; if an entry is proven wrong, aim to take 0 profit or small loss at exit. no greedy on mistake actions.

Personal theory of mine: Soros is better on TV. He is a better marketer and promoter. He is more fun to listen to.

Rogers is wicked brilliant, but boring. My kind of guy!

This is the reason McDonald's sells more burgers that anyone else. It ain't because they are better - it is because they are marketed better than any other.

If you exclude the broker and transaction fees it'd be a zero sum game. Including the broker&fees it'd be a negative sum game.

Soros traded long term based on macro-economic changes. He wrote a book about it, there's not much mystery there. In order to trade like that you've got to be able to survive several thousand pips drawdown, which means trading w/ little to no leverage or just getting very lucking on your timing.

Soros used a lot of leverage, which is why he's also had some nasty periods of loss to accompany his big wins. If you're not careful that becomes less about trading w/ the trend and more about trying to guess the start of a major move. It's also why they don't trade that way now that they manage other people's money.

Long story short... much of Soros's great fame is due to being bold and being lucky. Lots of people have tried to imitate him, all to their downfall. In order to stay in the game they've had to take a more sustainable approach.

It's all well and good to aim for 4000%, lol, but it'd be smarter to trade against that outcome. The odds just play that way.


Dunno. They're also cheaper. I can get 3 burgers, small fry, large coke for like $6 at 1am in the morning while I wait for the markets. There's more to their success than marketing .

Hi guys,

I'm glad rabid mentioned leverage. We have to remember that "markets can remain irrational longer than you can remain solvent" (I believe Keynes said that, but correct me if I'm wrong). Shorting the carry trade bubble in 2007 would've been the right trade, but you would've gotten killed if you were leveraged. Some analysts worth their salt from HSBC Investment Bank, the Dismal Scientist publication, and Jim Rogers all warned about this, and the market new that it would unwind but price moved thousands of pips up before it moved down on some of the yen crosses and it would've required waiting for a year.

My best solution to this is not to actually time the market (anyone who tells you they can time the market is lying and you should run), but look for a combination of a behavioral imbalance (i.e. crowd behavior or anchoring) combined with a change in sentiment. This can usually be spotted subtly as a correlation breakdown between certain dollar crosses and equities, etc. Another way is to wait for a catalyst to develop which changes the market's perception of a situation (i.e. a Gestalt Shift) This could be the adoption of a new focus by the market (i.e. from inflation concerns to deflation concerns as evidenced by Fed statements and reaction to relevant economic data).

I believe Soros used behavioral strategies to move both with the market and against the market and as some others on this post mentioned, he held them for long rallies. However, seeing that the large potential drawdowns means that these long term strategies cannot utilize leverage, I would argue from my own trading experience that it is possible to apply such behavioral strategies on the smaller time scale as well, to use more moderate leverage and compound your account growth faster. The key, in my opinion, is to recognize that the market has a low signal-to-noise ratio and you can take advantage of that by holding a fundamental view and fading any of the noise caused by behavioral trading.

Have a great weekend and take a break from the market everybody!

Jim Rogers, Tom DeMark and many other great ones have worked for and with George Soros.

They don't put on a trade just because their back bothered them. I doubt old George did much of the time either.

whatever it is he's an incredibly incredibly smart man, you can attribute his success to Demark, Rogers, Niderhoofer or anyone else. Fact remains he came to the USA as an immigrant with nothing and in 2008 was ranked the 28th richest man in the USA, ahead of Rogers and everyone else put together only investing person above him is Buffet.

In my opinion he's a much better trader/analyst than everyone else other than buffet.

Although George Soros made one Billion dollars in a single day trading currency, by his own admission he was never consistently successful in applying his methods of reflexivity to the currency markets.

Look at george soros picture in previous post:

Look at his grey hair. Look at his wrinkles on face. Grey hair and wrinkles can make you a successful person if you keep workng on your ideas.

My opinion of Soros is that of a master manipulator. His ego knows no bounds, and he now uses his "influence" to manipulate markets and political processes. It also doesn't hurt if you own a President.....

Soros isn't a master of anything. Soros is just like the rest of us traders. Nothing more, nothing less.

What make Soros so well know it the BOE thing he did a few decades back. For those who don't know, Soros begged, borrowed, & stole money from his clients so that he could stroke his own ego by placing a stupid, very risky bet against the Pound. With luck the market did favor his side and because of stupidity he's idealized as a great trader/investor.

Question: would we talk of him if he'd lose that bet? Probably not! Many traders before him and after did exactly as Soros did and lost it all. What Soros did is exactly what many of us on FF tell new traders: Don't bet the farm, don't put all your eggs in once basket, and manage your risk/money management. Soros broke all the rules of trading out of greed.

Traders are forever idealizing false prophets. If you need someone to idealize, then look towards Jim Rogers and the many traders that worked under Soros ... they are the real traders that helped Soros fund profit year after year.

When I was saying he is a master manipulator, it was not a compliment..
Personally I think he is a weasel. He uses his influence such as talking in Davos about gold being in a bubble, while his hedge fund was looking to buy gold. No different than insider trading in my mind.

Actually George soros maybe the greatest speculator/trader/investor of our time. I saw a youtube video where they said he may even be better than Buffet, the reason they gave was Soros may have made 10 billiion or whatever but he gave away a total of 10 billion as well going back from the beginningof his career to the prsent time. If he hadn't given the money away and compunded it like Buffet did he may have outdone buffet.

On the other hand Buffet is considered a miser and never gave away any money to anyone he just kept hoarding. Its only now when he has one foot in the grave did he realise gee I cant take all this money with me so i better give some of it away.

whereas Soros was always a philanthropist he gave away large amounts of money throughout his career to all sorts of charitable foundations and spent a lot of time trying to uplift the former eastern block countries by infoming them of the benefits of capitalism.

We should all so remember Soros was a WW2 refugee he came to the USA with absolutely nothing whereas Buffet came from a priviliged background.

Seriously all Soros did, was bet against the ideas that he funds. The guy seriously funds Obama, then bets against the dollar, but wait hes wrong because the Euro is weak, so the guy was once right and now is just a goof ball who really should never be listened to like Peter Schiff.

I think Soros is the true definition of crony capitalism, going against capitalism with anti capitalist politicians which he funds with money earned thanks to capitalism.

Soros supported the stimulus package, betted against dollar and guess what Euro went up because of something he tried to push around as good. Seriously look at it on the charts 2500 to 5000, then ofc Greece weakened the Euro..