Wednesday, August 23, 2006

Legends of the Trading World

Legendary traders like Jesse Livermore, Ed Seykota, Richard Dennis, Bill Dunn, George Soros, William O’Neal and so on, who have given astounding returns in a short period are evidence to the fact that it is certainly possible to outperform the markets even in very short time frames. Each one of them had their own tools and techniques of the trade, not necessarily pure technical analysis, but what was definitely common is their risk appetite, fire-in-the-belly attitude, discipline and tremendous strength of will to succeed in the shark infested waters of the securities markets.

Jesse Livermore

The wall-street legend who made and lost millions in a career spanning three decades. He was most famously blamed for the biggest crash in the history of humanity, the 1929 “Great Depression Crash”. He wrote many classics and also gave the trading world gems like “Fear your losses and let your profits run” and “Markets are never wrong, opinions are”.

Ed Seykota

A classic exponent of Trend Following®, he reportedly traded a model account for a period of 12 years and turned $ 5,000 into $ 15,000,000 ! He was mostly self-taught and trained many successful traders into profit making machines. He is special in the sense that he continually tries to make improvements in systems despite being hugely successful and rich.

Richard Dennis

Most famous for training the legendary “Turtles”. He placed an advertisement and selected random people including gamblers, accountants and teachers. He took a challenge by betting with a friend that traders can be made and are not born with the natural instinct. He succeeded and many of his former pupils now manage multi-million dollars. Before he even took this challenge, he had made his millions with his prodigal talent.

Bill Dunn

Bill Dunn, the Founder and Chairman of the very successful DUNN Capital Management, Inc and is known for his futures-based portfolio management and the extraordinary returns that they have managed to deliver to their clients. He is also a pioneer in introducing computer technology in managing portfolios. One very famous episode was how they made money in the sharply rising and falling Yen in 1995, which was unprecedented since most traders are known to have biases either towards the long or the short side.

George Soros

The Hungarian Soros, co-founded Quantum Fund with Jim Rogers. The fund reportedly returned 3,365 % in the next decade, making him a billionaire. He was dubbed the “Man who broke the Bank of England”, when in 1992, he sold $ 10 Billion worth of Pounds and made $ 1.1 Billion in the bargain.

William O’Neal

Follows a mix of quantitative and qualitative methods to pick stocks and is a medium term investor. He is known to have turned $ 5,000 into $ 200,000 within a year early in his career. He is also famous for following a strict stop loss criteria for his holdings.

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