Friends often ask me the following questions:

Can trading achieve hundreds of times returns?

Is fundamental analysis more important than technical analysis?

Does technical analysis really work? Can it lead to profits?

These were also my questions, but after reading many books and meeting many top traders, I found that these questions actually have definitive answers.

Today, I will share the stories of 5 real top traders in the market, their divine operations, life experiences, and the commonalities between them to answer all kinds of questions you may have.

From them, we can also learn their unique trading skills, logic, philosophy, and strategies, which we can use for our own benefit, and I believe it will be helpful to everyone.

1. Stanley Druckenmiller

When it comes to Druckenmiller, you might feel unfamiliar, but when we talk about Soros breaking the Bank of England, we are all familiar with it.Stanley Druckenmiller is the former Chief Investment Officer of Soros Fund Management, and a key figure in the short selling of the British pound in 1992.

Born in 1953, Druckenmiller began his financial career in 1977 when he joined Pittsburgh National Bank.

In 1981, he established his own investment firm, and in 1988, he joined Soros's Quantum Fund as Chief Investment Officer.

What are some of his historical highlights?

I'm not sure if everyone has heard of the "Black Wednesday" event? This is a famous masterpiece by Druckenmiller and Soros.

The United Kingdom was a member of the European Exchange Rate Mechanism (ERM), which was designed to unify European currencies. This mechanism aimed to maintain stability among European exchange rates by keeping everyone's currencies within a relatively narrow fluctuation range.

When joining the ERM, the UK was facing the dual pressures of high inflation and high interest rates, making it very difficult to maintain a fixed exchange rate.

At this time, Druckenmiller and Soros believed that it would be very difficult for the pound to continue to maintain a fixed exchange rate; they would eventually be forced to devalue the pound or exit the ERM.

So, before these things happened passively, Druckenmiller and Soros decided to massively short the pound. They leveraged $10 billion, exerting tremendous short-selling pressure on the pound, and many investors followed suit.

On September 16th, the selling of the pound reached its peak. The Bank of England tried to stabilize the exchange rate by massively buying pounds and raising interest rates, but it was too late. In the end, they had to decide to exit the ERM and allow the pound to float freely.After exiting the ERM, the British pound depreciated uncontrollably, with a significant drop in its exchange rate against the US dollar and the German mark.

Through this short-selling operation on the pound, Druckenmiller and Soros made a profit of over one billion dollars, which also established Druckenmiller's legendary status in the financial world.

What is even more remarkable about Druckenmiller is his consistency.

Before joining the Quantum Fund, Druckenmiller had his own investment firm called Duquesne Capital. During his tenure, his fund achieved an annual return rate of over 30% for as long as 30 years, which is an extremely impressive figure.

In the late 1990s, during the internet bubble era, he invested in tech stocks, including Yahoo and Amazon, and reaped very substantial returns.

In 1999, when Goldman Sachs was preparing to go public, he also participated in the investment and received a very high return.

In addition to these successful investment cases, he also avoided significant losses to his fund before the subprime crisis erupted in 2007 by using hedging trading strategies.

And in 2010, he closed his investment firm simply because "he could no longer maintain a high rate of return."

The most magical thing about this person is that he aggressively pursues opportunities while also having a keen sense of risk, and he retreats decisively when necessary. He is truly a rare all-rounder in history, very admirable.

2. Andy KriegerKrieger graduated from the Wharton School of Business and began his trading career by joining Salomon Brothers in the 1980s. In 1986, he moved to Bankers Trust as a senior foreign exchange trader. His trading style was very bold and aggressive, and he was adept at leveraging high leverage to achieve substantial returns.

Following the "Black Monday" stock market crash in 1987, the Dow Jones Industrial Average plummeted by 508 points, a drop of 22.6%. This was the largest single-day percentage decline in the Dow's history, with stock markets worldwide, including London, Tokyo, and Hong Kong, collapsing and market sentiment being extremely panicked.

At this time, Krieger sensed an opportunity. He noticed that the New Zealand dollar was overvalued and that its relatively small proportion in the foreign exchange market made it susceptible to large-scale speculative trading influences. He then took action, utilizing the high leverage provided by Bankers Trust to start a massive short position on the New Zealand dollar (it is said that the leverage ratio reached 400 times), betting against it through options and other derivatives.

His short position exceeded the entire money supply of the New Zealand currency, putting immense pressure on the New Zealand dollar, which plummeted 5%-10% against the US dollar within hours. Despite the Reserve Bank of New Zealand's intervention in the market, it was ineffective due to the sheer size of Krieger's short position.

From this trade, he earned the bank over $300 million in profit. In a dramatic turn, Bankers Trust offered him a bonus of only $3 million, which led to his departure from the bank in frustration. He then joined Soros Fund Management, the investment firm founded by George Soros.

However, his stay was not long-lasting. Shortly after, he left Soros's company and established his own investment firm. He also authored a book titled "Currency Markets: Exploring the Inside Story of the Trillion-Dollar Foreign Exchange Market," which delves into the inner workings of the global foreign exchange market, its manipulation, and influence. It is an interesting read for those who are interested and can be sought out for further exploration.Marcus is a legendary figure in the trading world, particularly adept at commodity futures trading, especially in gold and silver. His primary trading strategy is trend-following, focusing on long-term trends. He makes trading decisions by analyzing market momentum and price trends, which could be described as a long-term trend trader who goes with the flow.

His undergraduate and graduate studies were in psychology, but his early trading experiences were not smooth. He made similar mistakes to many of us, lacking a systematic trading strategy, being overly confident in himself, entering trades when the market had no clear trend, and continuously averaging down when in a loss, hoping for a market rebound to recover his losses, which resulted in significant losses.

Thus, he also had a dark past without a risk management plan, with incorrect expectations of the market, and was very persistent, leading to substantial losses in his early large investments.

So, in fact, everyone's trading journey is not smooth sailing. Before becoming a master, there must be many trials and tribulations. The difference between people is that some know how to turn setbacks into experience, while others are only willing to remain forever mired in the quagmire of setbacks, unwilling to emerge.

After many failures, he met a benefactor, another legendary trader—Ed Seykota. Seykota taught Marcus how to trade systematically and emphasized the importance of risk management and emotional control, which had a profound impact on Marcus's later success.

At Concordia Management, Marcus turned an initial investment of $30,000 into tens of millions of dollars in less than 20 years.

From the late 1970s to the early 1980s, influenced by inflation and geopolitical risks, gold experienced significant volatility. Marcus identified the bullish trend in gold through analysis and made buying operations. During the rise in gold prices, he gradually increased his positions and strictly controlled risks, achieving substantial profits.His trading has several key characteristics: identifying major trends, following trends, profiting from trend continuation by adding positions, and setting stop-loss points to ensure that the principal can be protected when the price retraces. He sets strict stop-loss points for each trade and also limits the risk of a single trade to within 1% to 2% of the total capital (which has also greatly inspired my own trading later on), a lesson learned from his early trading failures.

His experience is also described in "Market Wizards," where he is able to maintain his calm and rationality under market fluctuations and pressures, and to be patient and disciplined in trading, without being disturbed by the market and the outside world. These are essential qualities for a successful trader.

4. Bruce Kovner

Born in 1945, Kovner attended Harvard University for his undergraduate studies but did not complete his degree. He developed an interest in trading during his college years. After dropping out, he held various jobs, including a research assistant in a Harvard education program and a taxi driver, all to earn money to support his life.

He started trading in 1977, with his first trade being soybean futures with borrowed $3,000, which resulted in a profit of $20,000, directly solidifying his determination to pursue trading. Later, he joined Confer Investment Company (a commodity futures trading firm), where he gained a lot of trading experience and skills.

He is particularly adept at combining fundamental research with technical analysis. He uses fundamental research to identify potential trading opportunities and then employs technical analysis to confirm the specific timing for entry and exit.For instance, take his most famous investment in U.S. Treasury bonds. In the 1980s, the United States was in a period of high inflation, with inflation rates reaching double digits. To combat this inflation, the Federal Reserve significantly raised interest rates, using tight monetary policy to curb inflation.

Due to the high interest rate policy, economic growth slowed down, but inflation began to be gradually controlled. At this time, Kofner foresaw that the high interest rate policy would ultimately curb inflation, and as inflation decreased, the Federal Reserve would slowly start to lower interest rates. At this point, the prices of Treasury bonds would rise, and buying U.S. Treasury bonds on a large scale would definitely yield substantial returns.

So, after identifying this fundamental aspect, he used moving averages to confirm the upward trend in the Treasury bond market, looking for support levels as entry points. He used the Relative Strength Index (RSI) to ensure that the market was not in an overbought state, ensuring the effectiveness of the entry point. After the confirmation of the signals, he set stop-loss and target positions, and the rest was to strictly implement the trading plan.

In this trade, he was highly successful. Although the specific figures were not disclosed, it is estimated that he made hundreds of millions of dollars in profits. This trade not only tested his understanding of macroeconomics and monetary policy but also achieved very precise entry and excellent risk management, which is very much worth studying and learning from.

Previously, some friends asked me whether the fundamental analysis is more important or the technical analysis. I think in his case, there is also a very clear answer.

5. John W. Henry

Henry is a renowned Commodity Trading Advisor (CTA) and one of the pioneers of trend-following strategies. He has achieved great success in commodity and financial futures markets through trend-following strategies.The Basic Principles of Trend Following: The core concept of trend-following strategies is to identify and follow the main trends in the market to profit from them. Market prices tend to move in a certain direction for a period of time, whether it is an uptrend or a downtrend. The goal of trend-following strategies is to capture these trends, buying (going long) assets that are in an uptrend and selling (going short) assets that are in a downtrend.

Let's take a look at the main features and operation of Henry's trend-following strategy.

The technical indicators he mainly uses include:

Moving Averages: Utilizing Simple Moving Averages (SMA) or Exponential Moving Averages (EMA) to smooth price data and identify long-term market trends.

Momentum Indicators: Such as the Relative Strength Index (RSI), MACD (Moving Average Convergence Divergence), etc., to help determine the strength of the market and overbought or oversold conditions.

Bollinger Bands: Identify potential trend change points through the range of price fluctuations.

Channel Breakouts: Generate trading signals when the price breaks through a predetermined price channel.

His risk management strategy includes:

Stop-Loss: Setting stop-loss points for each trade to exit promptly when the market is unfavorable, limiting potential losses.Position Size Control: Adjust the size of each trade according to the account size and market volatility to ensure that the ratio of risk to total account funds is within a controllable range.

Diversified Investment: Trade in multiple markets and asset classes to diversify risks and reduce the impact of fluctuations in a single market on the overall investment portfolio.

His long-term perspective in trading:

Trading must be systematic and generated by computers, automatically generating trading signals based on preset rules and parameters, and strictly executed.

He believes that the long-term market will definitely provide opportunities, and after a trend is formed, it is essential to hold positions until the trend clearly reverses. This allows for maximizing profits from the trend and avoids the costs and slippage associated with frequent trading.

His trend-following strategy, at its peak, helped him manage an asset scale of several billion dollars, performing exceptionally well in futures and foreign exchange markets.

Some have also asked me, is technical analysis really useful, and can it be successful? The successful cases in the market can also provide us with answers.

6. What are the commonalities among these successful traders?

Firstly, they all have a very keen market sense, which is admirable. They can see market opportunities that others cannot and have the courage to seize these opportunities. At the same time, their research on the fundamentals is also very in-depth, otherwise, it would be impossible for them to capture these major trends in a timely manner.

From so many trader cases, we can also clearly see that they make mistakes, and most of the errors stem from two points: inadequate risk management and poor emotional control. These two points are worth our deep reflection.Additionally, both fundamental and technical analysis have their merits, and of course, a better outcome can be achieved by considering both. However, as ordinary individuals, if we try to grasp both, we might end up with a half-baked result. Therefore, choosing one side to delve into can also achieve this level of precision and profitability.

In the end, the masters remain masters; we can learn from them, but we should not copy them. Their success is due to favorable conditions, timing, and circumstances, which have their own context and timing, and are not myths that can be replicated in every era. We must learn objectively.

That's all for today's sharing, I hope everyone has gained something.