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About Bill Lipschutz

Bill Lipschutz

Imagine taking a $12,000 inheritance from your grandmother and turning that into billions of dollars trading? Well, this is the story of Bill Lipschutz. If you want to find an example of a trader who has really hit it big, then look no further than Bill, founder of Heathersage Capital Management. He is popularly referred to as the “Sultan of currencies”.

Bill Lipschutz

The Story of $12000 Dollars:

While Bill was studying Architectural Design at Cornell University; he inherited $12,000 worth of stock upon his grandmother’s death. While attending school, he began investing the risk capital in his free time. He would spend hours in the library, researching and reading about the market. This research increased his interest in financial trading, and his portfolio was eventually worth close to $250,000 within a 4-5 year period. He had an incredible string of success trading until he made one trading decision that blew up his account within a couple of days. Undeterred, he decided to learn from the experience and built a $200 million forex trading company. He made it into the Trader Hall Of Fame in 2006.

Life after graduation:

After graduating, Bill attended the Salomon Brothers investment company training program and later on was working full time for the company. By 1984 he became the main trader in the company and bought Salomon Brothers earnings for $300 million dollars per year. His successful performance remained steady until he left in 1990.

Bill Lipschutz’s Trading Strategy:

Bill Lipschutz has had his fair share of losses like all the great traders. One of them involved his personal account, in which he lost $250,000. It is such experiences that helped him develop his trading strategies which helped him to perform greatly in the market.

“I don’t trade on dreams or rumours. I’m a fundamental trader. I try to assemble facts and decide what kind of scenario I think will unfold.” –Bill Lipschutz.

Bill Lipschutz’s Trading Strategy
It’s the fundamentals which drive the big trends and Bill had the discipline to follow his basic strategy of placing trades only when the fundamentals are favourable and he will study all the facts to determine a justification for a trade before placing it in the market. This may sound simple but most traders don’t have the ability to study the facts and work out there impact on prices.

Trading Tips from Bill Lipschutz:

  • Pay attention to multiples- One should always pay attention to the Risk-Reward Ratio. For Short-term trades, Bill looks for a 3-to-1 multiple of upside and downside. Whereas for a complicated trade the ratio should be close to 5-to-1 as a minimum.
  • Pay attention to market sentiment- Bill places a lot of emphasis on sentiment. Even if the market perception is based on shaky or non-existent facts, it is still going to have a huge impact. If traders think that something is going to happen based on their charts, then something is going to happen just because of the momentum in the market.

Bill Lipschutz not only is a great trader, but he was also driven to be one of the best traders and it’s obvious he loves the challenge of what he does. His status in the industry was reflected by his induction into the Traders Hall of Fame and he is acknowledged as one of the best FX traders of all time.

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