If you think that a taxi driver cannot be a billionaire trader then you are greatly mistaken.
Having said that, the chances of taxi drivers becoming a billionaire trader is really low and the ratio maybe like 1 is to 1 billion. (Just guessing).
Now, this is a story about a guy who was once a New York taxi cab driver.
His name is Bruce Kovner.
Bruce Kovner’s Net Worth According To Forbes
Bruce Kovener’s net worth, according to Forbes sits at $5.3 Billion as of 9th April 2016 and this was the screenshot I took:
Bruce Kovner’s Early Days
- Bruce Kovner is from a Jewish background
- His Grandparents fled From Poland and Russia to America due to persecution, and they were absolutely penniless.
- Bruce’s father was a Mechanical Engineer and the family worked their way up to Middle Class level eventually
- Bruce Kovner credits his family for the belief that “Anything is possible in America with proper education and hard work.”
- Bruce finished high school and entered Harvard University.
- After graduating, he struggled to find what career path he would take and decided to take a doctoral program at Harvard’s John F. Kennedy School of Government. But guess what, he left before finishing his doctoral studies.
- He ended up studying Piano and Harpsichord at Juilliard School In New York City.
- He also ended up working on Political campaigns and this really did not lead him anywhere.
Bruce Kovner The Taxi Driver
He got married in 1973 and started driving taxis in New York. It was during this time that he was introduced to the commodities market.
He was fascinated. He really started to develop a strong interest in it and after work at night he would study the markets.
Then in 1977, he opened a brockerage account and started trading with $3,000 from his MasterCard. Yep…that’s a credit card.
What Happened To The $3,000 Trading Account?
Bruce Kovner turned his initial $3,000 trading account to more than $20,000. As the story goes ” He never looked back!”
He eventually ended up being a commodities trader in the late 1970 under the guidance from Michael Marcus at a company called Commodities Corporation.
Kovner really excelled at trading there. After spending 6 years with them, he decided to form his own hedge fund called Caxton Associates in 1983.
Billionaire Trader Bruce Kovner’s Trading Highlights
- In 28 years after starting Caxton Associates, Kovner never had a unprofitable year except in 1994 when the fund declined 2.5%.
- Average annual returns for the hedge fund was 21%. This does not seem like much but if your hedge fund has a trading assets worth billions, then 21% is a huge amount of money to make in a year.
- He made more than $12 billion in cumulative gains for that 28 year period. Very impressive indeed!
Bruce Kovner’s Trading Strategy
There’s nothing specific online or anywhere else where you can find out about what kind of trading strategy Bruce Kovner uses but here are some things I got from searching online. Whether they are true or not, just take it with a grain of salt, ok?:
Bruck Kovner is known for seeing the big picture and how different markets interact and has a deep understanding of the fundamentals but also checks charts and has a great insight into market sentiment.
He compiles sentiment reports daily to check for bullish and bearish extremes.
He tries to imagine a world different from today (known as alternative scenarios) and has a strong conviction in his view which enables him to trade against the crowd with discipline and conviction.
Billionaire Trader Bruce Kovner’s Trading Quotes
Here are some of Bruce Kovner’s trading quotes:
“Fundamentalists who say they are not going to pay any attention to the charts are like a doctor who says he’s not going to take a patient’s temperature.”
The quote above simply means, he studies the fundamental data very carefully and in depth to gain a really good insight into the what can drive the markets and then combine this knowledge with technical analysis to gain a trading edge.
“To make money, you have hold a position with conviction. It is hard to do so when you are following someone elses”
No doubt, this is one of the best trading tips you can have a a forex trader.
“Whenever I enter a position, I have a predetermined stop. That is the only way I can sleep. I know where I’m getting out before I get in. The position size on a trade is determined by the stop, and the stop is determined on a technical basis. I never think about other people who may be using the same stop, because the market shouldn’t go there if I am right”
“Place your stops at a point that, if reached, will reasonably indicate that the trade is wrong, not at a point determined primarily by the maximum dollar amount you are willing to lose”
You see, even a billionaire hedge fund trader uses stop loss orders in his trades because he has strong money management practice.
“If you personalize losses, you can’t trade.”
You see, the market will give you trading losses. Don’t take it personal. That’s the nature of the market, its going to happen if you like it or not. Having a stop loss does not mean you made a bad decision. That’s part of the whole process of making money.
I like going out fishing…I can do 20 casts during the day with my fishing rod going through 20 baits with and catch only 5 fish in the 20 casts. The same principle applies in forex trading. Not all the bait you cast out will catch a fish.
“The Heisenberg principle – If something is closely observed, the odds are it is going to be altered in the process. The more a price pattern is observed by speculators the more prone you have false signals; the more the market is a product of nonspeculative activity, the greater the significance of technical breakout”
- this story of billionaire trader Bruce Kovner just goes to show that you can make a fortune with a $3,000, even if it is borrowed from a credit card! The key to success in trading is managing your trading risk.
Fact: When boxer Manny Pacquiao has a fight, the crime rate in his native Philippines drops to 0%.
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