Everything You Need to Know About Forex Brokers
In this video, you’ll learn what a forex broker is. Forex brokers are financial services companies that provide traders access to a platform for buying and selling foreign currencies. Trading is primarily between pairs of currencies of the nations that are represented in the G10. Learn more about opening a forex trading account, how forex brokers make their money and who regulates the industry.
Reviewed by Somer AndersonFact checked by Jared EckerReviewed by Somer AndersonFact checked by Jared Ecker
Several currency traders have posted incredible results over long careers and have impacted the investment industry. These individuals have advised novice forex traders and journeymen looking to improve their bottom-line results and enhance financial performance.
Key Takeaways
- George Soros rose to international fame breaking the Bank of England in 1992.
- Stanley Druckenmiller worked with Soros on the notorious Bank of England trade.
- Anthony Krieger netted $300 million for his employer.
- Bill Lipschutz was earning more than $300 million per year by 1985.
- Bruce Kovner founded Caxton Associates in 1983.
See Investopedia’s choices for Best Forex Brokers.
George Soros
George Soros was born in 1930 and began his financial career at Singer & Friedlander in London after leaving Budapest, Hungary in 1947. He established Soros Fund Management in 1973. The highly successful firm reportedly generated $22 billion in profits in August 1998.
Soros rose to international fame in 1992 as the trader who broke the Bank of England, netting a profit of $1 billion after short-selling a reported $10 billion in British pound sterling (GBP). The U.K. withdrew the currency from the European Exchange Rate Mechanism on Sept. 16, 1992, after failing to maintain the required trading band due to Soros’ trade. This solidified a day known as Black Wednesday.
Stanley Druckenmiller
Stanley Druckenmiller grew up in Philadelphia and began his financial career in 1977 as a management trainee at The Pittsburgh National Bank. He formed his company, Duquesne Capital Management, three years later. Druckenmiller successfully managed money for George Soros as the chief strategist for the Quantum Fund between 1988 and 2000.
Druckenmiller also worked with Soros on the Bank of England trade. His fame intensified when he was featured in the best-selling book The New Market Wizards, published in 1992. He closed his hedge fund, admitting he was worn down by the constant need to maintain his successful track record after surviving the 2008 economic collapse.
Andy Krieger
Andy Krieger joined Banker’s Trust in 1986 after leaving a position at Salomon Brothers. He acquired an immediate reputation as a successful trader and the company rewarded him by increasing his capital limit to $700 million, significantly more than the standard $50 million limit. This bankroll put him in a perfect position to profit from the Oct. 19, 1987 crash known as Black Monday.
Krieger focused on the New Zealand dollar (NZD) which he believed was vulnerable to short-selling as part of a worldwide panic in financial assets. He leveraged his exposure by using foreign currency options with his already high trading limit, acquiring a short position that may have rivaled the New Zealand money supply. He netted $300 million in profits for his employer.
Bill Lipschutz
Bill Lipschutz started trading while attending Cornell University in the late 1970s. He turned $12,000 into $250,000 but lost the entire stake after one poor trade. He began working for Salomon Brothers in 1981 while pursuing his MBA degree. Lipschutz migrated into Salomon’s newly-formed foreign exchange division as forex markets rose in popularity.
He became the principal trader for the firm’s massive forex account in 1984, holding that position until his departure in 1990. He moved to Principal and Director of Portfolio Management for Hathersage Capital Management.
Bruce Kovner
Bruce Kovner was born in 1945 in Brooklyn, New York. He made his first trade in 1977 when he was 32 years old. He borrowed against his credit card to buy soybean futures contracts and netted a $22,000 profit. He subsequently joined Commodities Corporation as a trader, booking millions in profits and gaining a solid industry reputation.
He founded Caxton Associates in 1983, transforming it into one of the world’s most successful macro hedge funds. The fund’s profits and management fees were split between financial and commodity positions and the reclusive Kovner was one of the biggest players in the forex world until he retired in 2011.
What Is the European Exchange Rate Mechanism?
The European Exchange Rate Mechanism (ERM) monitors exchange rate fluctuations between the euro and the currencies of European Union countries that don’t use the euro. These include Denmark and Bulgaria. The ERM in place as of 2024, is referred to as ERM II. It was put in place in January 1999.
How Are Currencies Traded on the Forex?
Currencies are always traded in pairs, with one currency being the base currency and the other the quote currency. The (EUR/USD) is the most popular currency pair.
What Are the Trading Hours on the Forex Market?
Investors can trade most currency pairs on the Forex market 24 hours a day, seven days a week.
The Bottom Line
From Soros to Kovner, the common theme among this list of famous forex traders is that they have profited mightily from their thoughtful trades. Coupled with self-confidence and an incredible appetite for risk, this has cemented them among the historically famous forex investors.
Read the original article on Investopedia.