What does George Soros say about trading and investment?

What does George Soros say about trading?

George Soros is known as the man who “strikes across the Bank of England”.

He won this title in 1992, when he shorted the British pound and made more than $1 billion.

As the manager of the Quantum Endowment Hedge Fund, he manages more than $27 billion in assets.

He is regarded as a legend in trading and investment, and we can learn a lot from him.

According to Forbes, as of September 2015, George Soros has a net worth of US$26 billion, ranking among the 21 richest people in the world.

Interestingly, he earned this wealth without using any initial capital or capital.

When his book “Financial Alchemy” was published in 1987, I was very excited because I finally knew the secrets of his trading and the techniques he used.

But when I finally finished reading this book, I was disappointed because it did not reveal or explain any special “secrets”.

After many years, I realized that I was just not ready to read this book at that time, and I didn’t understand the wisdom of it until later.

Like all business experts, Soros has his own ideas and opinions on financial markets and investment.

Below I quote some of his most important words and the meaning behind his statement.

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1. The market is unpredictable – seize the opportunity

“Financial markets are usually unpredictable. So you have to have a different perspective … your idea of ​​what will actually happen is contradictory to the way I look at the market.”

According to Soros, the market tends to favor one another and it is difficult for people to predict.

When, where, and how prices change.

The important thing at this time is to be prepared for every situation that may happen and to take advantage of the opportunities that may arise.

2. Trade with an appropriate risk-reward ratio

So how do you succeed in the market in this situation? This is another famous quote from Soros:

“What matters is not whether you are right or wrong, but how much money you make when you do it right, and how much money you lose when you are wrong.”

The important point to emphasize here is that even if you don’t win most trades, you can still make money in trading.

How is this done? Through proper risk management and risk-reward. It’s really simple.

The use of risk-reward ratios in transactions involves establishing transactions in this way so that you can earn twice the amount of risk (or even more) you assume; this system, together with proper risk management, will return you.

3. Keep it elegant, keep it simple

Interestingly, Soros is mainly recognized as a short-term speculator.

In practice, this means being in a highly leveraged trading position in the direction of the potential market.

The following is its philosophical background:

“The market is a mathematical assumption. The best solution is elegance and simplicity.”

Keeping ethics simple in life usually pays off, and investment is no exception.

Soros established his own financial empire by following his rules.

Obviously, a simple, clear and effective trading strategy is definitely better than a complex system that does not work.

4. The market tends to fluctuate – take a good look

At the same time, the nature of the market cannot be ignored.

Soros’s views are as follows:

“I put forward a very general theory that financial markets are inherently unstable. When we think that the market is in equilibrium, what we see is actually an illusion.”

Soros argued that the market does not tend to be in equilibrium, on the contrary, it is affected by volatility and cyclical crises.

When observing the market, equilibrium is just a false assumption.

This means that a good investor should have a sufficient understanding of risks.

5. Appropriate risk

“Taking risks is painful. Either you are willing to take the pain yourself, or you try to impose it on others. Anyone who engages in risk-taking business but cannot bear the consequences is not qualified. Concentration is too dangerous. I do need to take risks. The related excitement helped me think clearly. This is an important part of my ability to think. For me, taking risks is an important factor in thinking clearly.”

If you cannot enjoy taking risks, especially financial risks, it is difficult for you to survive among traders.

Risk helps to concentrate, he said, in a similar way, when my money is at risk, I feel that I am more enthusiastic and understand the market better.

However, there are subtle boundaries between focus, over-participation, and over-trading.

Risk keeps you focused, but you can’t spend your time watching the chart all day long.

Moreover, you must really love this “game” to play it well.

Some people just don’t have the psychological quality to be able to take financial risks and cannot use their money to effectively operate online in the market.

6. Investment requires rational thinking

“If investing is fun and you are having fun, you may not be making money. Good investments are actually boring.”

In order to reach a good deal, you should get rid of your sensibility and simply base your decision on correct judgment, consistency and code of conduct.

These are just some of Soros’s famous quotes, pointing out his unique way of thinking and perfect business thinking.

I hope you will be greatly inspired and make the most of his ideas in your trading.

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