Born in 1930, George Soros survived Nazi Germany-occupied Hungary and moved to the United Kingdom in 1947. George Soros made more than 1 billion dollars in 1992 by short-selling the British Pound Sterling.

George Soros Trading Tips

1. Markets are Unpredictable, Scenario Planning is the Solution

The financial markets generally are unpredictable. Successful traders abide by this philosophy by heart. Markets truly are random and no one knows where, when, and how prices will move. The biggest opportunities lie in those unexpected events because most people are betting on the obvious, and in the market, most people are wrong. The key is to be ready for every scenario that can happen so that you can take advantage of the opportunities that lay ahead.

2. Form a Hypothesis and use Trial and Error

Form a hypothesis and get the opinion of others on it. When we take inputs from people, we are able to get a better perspective. Once we actually form one, we can apply it in reality. If the thesis works well in the market, try and stick to it else withdraw from it and go for a new one. Trial and error are best for stocks.

3. Investing should be boring, not entertaining

If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring and personal emotions have no place in investing. If you want to be successful in the long run, base your investment decisions on rationality and discipline.

4. Recognizing Mistakes and Cutting Losses Short

I’m only rich because I know when I’m wrong. I have survived by recognizing my mistakes. You must recognize and admit your mistakes when you make them, cut your losses short, and move on to the next logical step.

5. The worse a situation becomes the bigger the upside

The worse a situation becomes the less it takes to turn it around, and the bigger the upside. This is true in life as well as in investing. When you hit rock-bottom, every inch of improvement feels so much better and powerful.

6. Bubbles are based on Misconceptions

Stock market bubbles don’t grow out of thin air. They have a solid basis in reality, but reality as distorted by a misconception. Stock market bubbles start with good corporate or economic fundamentals. Things just go out of hand when people’s misguided greed comes into play.

7. Always Keeping Things Simple

The more complex the system, the greater the room for error. A simple but effective investing system will always beat the crap out of a complex system that doesn’t work.

■ George Soros Trading Tips

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