Dec 28, 2016 12:27 PM

George Soros: Trader or Philosopher?

Dear Traders,

This man has a lot of names: business magnate, investor, philantropist, political activist, writer and "The Man Who Broke The Bank of England". During his long life he has lived through a lot of terrifying things, including the occupation of Hungary by Nazi Germany. We can only guess how much the events of these years could change a man and what can it do to him, but this time has given us a special generation of strong and determined people, who can do anything. And George Soros is certainly one of them.

After immigration to England in 1947 Soros became a student of the London School of Economics. "I had a variety of jobs and I ended up selling fancy goods on the seaside, souvenir shops, and I thought, that's really not what I was cut out to do. So, I wrote to every managing director in every merchant bank in London, got just one or two replies, and eventually that's how I got a job in a merchant bank" he says.

In the middle of 1950s Soros moved to the USA and started to work as an arbitrage trader with specialization in European stocks. In 1990s Soros has been working on building his positiong on the English markets, because during that time England has been brought into the European Exchange Rate Mechanism and inflation was very high then. On Black Wednesday Soros's fund sold short more than $10 billion in pounds. Shortly afterwards, the pound was devalued and Soros's profit was around $1 billion.

George Soros is a short-term trader. One of the main reasons what makes him different from other traders is his love for philosophy and the way he interlaces it with his trading style. He has developed his own trading style and the "Soros way" is truly the must learn thing for every trader.

His main principle is theory of reflexivity based on ideas of his teacher Karl Popper. In few words, this theory applies that quite often market values are driven by the wrong decisions of participants, not only by the economic fundamentals. On the market influence is coming both ways: decisions affect events and events affect decisions. Therefore, there are cycles of boom and bust on the market and every cycle can be predicted.

One of the most famous thing about his trading strategy is that it is oriented on the global macro economy. Soros does not limit his trading views to one region only, but consider the world as a whole place full of trading opportunities. Detailed study and analysis gives him an exceptional understanding of how things work and how to profit from it.

Finding the best strategy does not make you a successful trader right away. To make sure that everything is working the way you expect it, you need to test it on the small amounts first and only then go big. "Read and reflect” before starting to act.

Patience, discipline and gloabal approach can become the best friends of every trader, who is planning to go professional. There is no ideal in the market world, but we can learn from each one a little.

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Sincerely yours,
Ayrex Team.