26 May Who Are The Best Traders In The World And Why Should You Care?
What do the best traders in the world have in common?
You could assume that most of them are pretty smart right? I mean, 90% of all traders fail to make money trading stocks so that’s very impressive. Obviously none of them are stupid but is intelligence the primary factor that determines if someone succeeds or not?
While you might think so, in reality it’s not. Ofcourse intelligence plays an important role but it’s not the most important factor and I can guarantee it.
How can I make that bold statement? Well, because numbers don’t lie!
If intelligence was the primary reason, the success percentage would be much higher then 10 percent. Why? Because the world isn’t divided into 10% smart people / 90% below average people.
So if intelligence isn’t the primary reason for success, what is?
It would be great if I could give you a short answer but there isn’t one. Success in trading depends on multiple factors just like success in any other profession. However there are some factors that are more important than others.
I’ll write a post about the habits of the best traders in the world so I won’t be discussing all of those factors here. I will however discuss one important factor and that’s examples/guidance!
People who are great in anything, be it Football, Writing or Chess all have one thing in common and that’s having a role model.
They all had or have role models who they observed and learned from!
You probably know where I’m going with this but if not, let me explain. It’s important to know who the best traders in the world are because you’d be smart to learn from them.
Obviously it’s not likely to expect that any of them will teach you personally but that’s not necessary.
You can learn from those who are called the best traders in the world without being coached by them. The only thing you have to do is make a serious effort in studying and modelling them.
If you prefer a coach, visit this page to see if one of my limited coaching spots is available.
The best traders in the world
Because I want to give you as much value as possible i’ve handpicked this list based upon two criteria.
The first is that I’ve looked at the kind of trader someone is and how likely it is that we can model their trading style.
For example, I didn’t include any traders who use multi million dollar algo software to make their trades since we don’t have access to those kind of softwares.
The second thing I’ve looked for is if they actually shared some tips with the public. If they didn’t, it wouldn’t be much use for you to know them.
Okey lets start with one of the greatest trading legends ever lived.
1) Jesse Lauriston Livermore
He was born on 26 Juli 1877 and died on 28 November 1940 by suicide. Jesse Livermore was the main character in the book Reminiscences of a Stock Operator by Edwin Lefèvre. Jesse Livermore made the biggest part of his fortune by shorting the US stock market in 1907 and 1929 but he wasn’t always able to keep his fortunes. He gained fortunes but also lost furtunes multiple times in a row.
- It’s more likely that prices move along the line of least resistance than not.
- Your best trades will move into profit very quickly.
- The best traders in the world have practiced a lot and are still practicing. You can’t expect to become a great trader if you don’t put in the time.
- The market is always right so don’t fight it.
- Prevent trading with too big of a size compared to your capital (If you can’t sleep at night your position is to big).
- Never ever trade for the thrill of trading! Trading is a serious business, one of the most difficult businesses ever so take it seriously.
- Don’t listen to stock tips from others if you don’t know what you’re doing. And even if you know what you’re doing it’s much better to develop your own skills instead of depending on the skills of someone else. (D0 however listen to tips on how to improve your trading skills from people who you have verified that they know what they are doing).
- You should never be afraid to take a small loss (You should be afraid to be wrong and let your small loser grow into a big loser).
- The best traders in the world always wait for price action to confirm their opinion.
- Instead of averaging your losing trades you should cut down on your position size.
- Don’t try to pick the turns, meaning the bottoms and the tops.
- Make a serious effort to manage your emotions because if you don’t, they’ll be your biggest enemy while trading.
- You need to follow a logic and statisically proven plan.
- The best traders in the world don’t care about getting rich quick! You shouldn’t focus on those schemes either.
Read the wikipedia page of Jesse livermore for more details.
2) William Delbert Gann
He was born on 6 june 1878 and died on June 18 1955. He developed a technical analysis method called the GANN angles and multiple tools like the Square of Nine, The Hexagon Chart And the Circle of 360. All his trading strategies were based upon geometry, astrology, astronomy and ancient methematics.
- It’s unwise to risk more than 10 percent of your total capital on one trade and even 10% can be considered too risky. It’s best to never risk more than 5 percent.
- Never enter a trade without a stop-loss order, be it mechanically or mentally.
- You should avoid overtrading at all costs. Limit your trades to two trades at a time.
- You may never let a winner turn into a loser! If your trade is in the green you should move your stop-loss in order to protect some of the profits.
- If you are not sure of the general trend of a stock, don’t trade it! The best traders in the world never trade against the trend.
- If you see that the stock isn’t sure about it’s direction and you’re in doubt, get out! Also never get in when in doubt.
- Never trade inactive and/or illiquid markets
- It’s best to distribute your risk equally among different kind of markets/sectors.
- Always go for big winners instead of many small scalp winners.
- You should never ever average a losing position.
- It’s forbidden to enter a market because your impatient and or bored. It’s also forbidden to enter a market because your anxious to get started.
- Cut your losses while they are still small. The best traders in the world never let their small losses turn into big losses.
- Never move a stop loss if the trade is moving against you. Don’t keep increasing your risk area!
- Avoid getting in and out of the market too often. Overtrading is awefull.
- Don’t have a general short or long bias. You should be following the trend at all times and profit from both sides.
- Never buy or short sell a stock because the price is high or low. Always follow a logic and proven plan.
- Never hedge a losing position, get out of it instead!
- You shouldn’t change your position without a good reason.
- Never try to pick bottoms or tops, wait until the market shows you where the bottoms and tops are.
- You should try to avoid following stock tips from other people. Especially if you don’t already know what you are doing.
- Reduce your trading size after you’ve lost on a trade. Never increase your trading size because this can result in a snowball effect emptying your account.
Read the wikipedia page of William Delbert Gann for more details.
3) George soros
He is a Hungarian-American investor who was born on 12 august 1930 and survived the Nazi Germany regime. In 1947 he decided to emigrate to England where he went to the London school of Economics. Eventually he managed to graduate with a bachelor’s and ultimately a Master’s in philosophy. His own investment career began with taking different kind of jobs at merchant banks. People call him the man who broke the bank of england because he shorted the English pound in 1992 with a value of 10 BILLION dollars and made a huge profit. So he surely deserves a spot in this list of the best traders in the world.
- Spend extra time on finding a great broker that meets your specific needs. (For example; fast execution, shortable stocks, great charts, etc).
- Always make sure there is some kind of balance in your life and you take enough time to relax your mind. You’ll need it to perform at your best.
- You shouldn’t be afraid to make mistakes. Trial and error is what will make you successful so the faster you start making mistakes the faster you’ll succeed.
- If you’re in a losing streak, it’s best to quit trading for a few hours, days or weeks. Make sure to come back with a fresh mind.
- Trading isn’t about having fun, if you are having fun you’re probably not taking it as serious as you should. The best traders in the world take trading very seriously.
- Personal emotions have no place in trading
- The worse a situation becomes, the less it will take to turn the situation around. So the worst the situation the bigger the potential profit.
- Try to keep your trading strategies very simple because the more complex the system, the greater the probability that you’ll make mistakes.
Read the wikipedia page of George Soros for more details.
3) Paul Tudor Jones
He is born on 28 september 1954 and is currently still alive. He founded his own hedge fund, Tudor Investment Corporation in 1980. According to Forbes, as of february 2017, his estimated Net Worth is 4.7 BILLION dollar. He focuses much of his time and money on philantropic goals.
- Never overtrade
- Never try to pick a battle with the market. Don’t let your ego make your decisions.
- One of the biggest problems of novice traders is that they trade to big of a size compared to their account size.
- Don’t tolerate big losers! If the market is moving against you, get out immediately.
- Each time I lose on a trade, I trade smaller size on the next one. I keep doing this until I have a winner and when I do,I increase my position size with each winner I get.
- Never average a position that is going against you.
- Don’t trade when you’re in doubt! The best traders in the world always enter a trade with confidence.
- Get out because you can always get back in
- The most important rule of trading is that you should always be playing defence instead of offence.
- Never neglect to set a stop loss
- I not only use price stops, I also use time stops. For example; If I enter a stock at the breakout level and the stock takes ages to continue it’s breakout i’ll exit my trade.
- Don’t focus on making money, focus on improving your trading skills / process. That’s what the best traders in the world do!
- Use the 200 exponential moving average in order to determine changes in the long term trend.
Read the wikipedia page of Paul Tudor Jones for more details.
4) Bruce Kovner
Born in Brooklyn, New york, 1945 and currently still alive. His own fund CAM capital was founded in 2012 with the purpose of managing his own investment and trading activities. From 1983 to 2012 he was the chairman of Caxton Associates.
- Focus on the effort you’re putting in! If you are not willing to put in the effort, you’ll fail. If you are willing to put in the effort then your in the right place because this is a profession which can make you a millionaire.
- Always stay rational because you can’t make good decisions if your mind is clouded by biases.
- Don’t take a position if you don’t understand the trade.
- Don’t take positions where you can lose a big deal of cash.
- Risk management should be your primary goal. Never take too big size compared to your total account size.
- If you take multiple positions, make sure they are in different sectors. If you neglect to do this, in reality your trading just one big position.
- The best traders in the world always know where they will get out before they get in. Always set a stop loss.
- Don’t bother about losses if they are the result of proper trading techniques.
- The best traders in the world never hope or wish.
- Losing is part of the trading game so you should never personalize losses. If you make that mistake than you’ll beat yourself up everytime you experience a loss and eventually you won’t be able to bear it any longer.
- Never be greedy because the market will punish you.
- Technical analysis is great but never neglect to look at the big picture
- Obviously it’s important to monitor your trades but do it in an appropiate way. The heisenberg principle states that if something is closely observed, the odds are that it’s going to be altered. For example; if you take a position and you are constantly watching it in the smallest time frame possible you get so many ”signals” that you may be tempted to get out even while there is no good reason when looking at a higher time frame. So if you enter a trade on the 5 min chart, it may be very helpful to monitor the trade on the 15 or 30 min chart.
Read the wikipedia page of Bruce Kovner for more details.
4) William Oneil
He was born on march 25, 1933 and is currently still alive. He is an American investor, writer and Entrepreneur. In 1963 he founded the Stock brokerage firm William O’Neil & Co Inc. and in 1983 he founded the business newspaper Investor’s Business Daily. He is the author of multiple books, including How to make money in Stocks and the 24 essential lessons for investment success.
- The best traders in the world don’t let their small losses grow into big losses. Cut your losses fast.
- Don’t fight the trend. Especially not if your not good in picking reversals.
- Don’t enter the market in order to make a quick buck. Take trading very seriously otherwise you’ll lose your money.
- The best traders in the world don’t buy based upon tips, announcements or any other events. They trade based upon a logic and statistically proven system.
- Never buy or short a stock simply because you like or don’t like it.
- Let your winners run! Always make sure that your winners are much bigger than your losers.
- Trade based upon what you see. If you see that it’s a good moment to enter the stock, do it and don’t hesitate. Trade like a robot and not like a human full of doubt and indecision.
- Always use a stop loss! Know where to exit before you enter.
- Don’t buy cheap stocks, focus on stocks between 15 and 300 dollar.
- Focus on growth stocks.
- The best traders in the world don’t trade a breakout if the volume is weak!
- Increase your position size if the stock is going in the right way. Decrease your position size if the stock is moving against you.
- Leave your ego at home because you should never ever argue with the market.
- Don’t try to pick bottoms or tops because it’s very likely that you’ll get destroyed.
Read the wikipedia page of William O’Neil for more details.
5) Ed Seykota
Born on 7 august, 1946 and currently still walking around on this planet. He is a commodities trader with a degree in Electrical Engineering from MIT and Management from the MIT sloan school of management. He is the author of two books; The trading tribe and Govopoly in the 39th day.
- First I look at the long term trend, then I look at the current chart pattern and last but not least I look at a good spot to buy or sell. Looking at fundamentals have costs me money!
- I always know where i’ll exit my trade before I enter.
- More often than not I’ll use trailing stops to protect my gains.
- The best traders in the world are great in managing their emotions. If you’re not able to manage your own emotions, you’ll lose more money then necessary.
- Never use more then 10% of your total account size on any specific trade.
- You should never risk more than you can lose but your size should still be meaningful, otherwise it’s useless to expose yourself to the risk of the market.
- Ignore advice from other traders, especially advice from traders who think they’re on a sure ”thing”.
- Pyramiding should be done in the correct way! If the trade is going into your direction, your first add should be your biggest add. If the market continues to go into your direction keep adding exponentially smaller size.
- Never trade against the trend.
- Expect that the profitability of trading systems will move in cycles. In periods where a specific strategy seems to be very profitable it will attract a lot of players. If to much players play the same game the profitability tends to lower making it less attractive. If enough people stop playing that strategy the strategy will start to become more profitable again and in time it will start to attract more players, again. Rinse and repeat.
- The best traders in the world always make sure to analyse their own trades/trading style.
- Never let a small loss grow into a big loss.
- Let your winners ride as long as you can.
Read the wikipedia page of Ed Seykota for more details.
Who is missing from this list of best traders in the world?
I’m probably missing a few good traders so I would love it if you could help me out. Which great trader deserves to be in this list?
The only requirement that he or she will need to meet to be included in this list is that you can find some tips shared by them.
If you know someone please leave a comment below this article. If we believe that this person should indeed by added to this list we’ll do that as soon as possible.
Why should you re-invent the wheel?
If you are really serious about trading you should use something Tony Robbins calls Modelling.
In this case it basically means that you should know who the best traders in the world are and make it your mission to study them relentlessly. Next you should mirror their thinking and behaviour to the smallest details possible.
This won’t guarantee that you get the same results but it will guarantee that you’re moving in the right direction.
Don’t want to study on your own? Would you like to have a coach which can easily spot your mistakes and point you in the right direction?