12 Famous Day Traders and Key Learning Lessons

Since the onset of day trading back in 1867 with ticker tapes, there have existed millions if not billions of day traders.^[1]

While we do not know many of these traders, a few of them rose and made history. Some made billions, while others made and lost billions. Some shaped the world of trading as we know it today and others greatly influenced the economies of nations. ^[2]

There’s much we can learn from these market wizards.

Let’s dive in and learn more about some of these famous day traders, their careers and some of their most valuable trading secrets.

Key Points

• Successful traders like Jesse Livermore kept trading journals to learn from their mistakes and successes, highlighting the importance of self-reflection and adherence to personal trading rules.
• Traders such as William Delbert Gann and Richard Dennis have demonstrated that market patterns tend to repeat themselves, and that trading can be taught to anyone with the right mindset and approach.
• Hedge fund managers like George Soros and Bruce Kovner teach us the significance of having strong conviction in our trading decisions and the necessity of understanding and managing risks effectively.

#1. Jesse Livermore

Jesse Livermore (1877-1940) was a successful stock and commodities trader. His trading career was characterised by massive highs and significant lows.^[3]

He made his first $1 million by 30 which he lost in the next year after taking a loss on a cotton position. This loss came from a trade based on the opinion of a commodity expert.^[4]

However, he kept a trading journal which he studied everyday to learn from his mistakes and successes.

The peaks of his career came when he sold his wheat position for $10 million in 1925, and when he shorted the Great Depression of 1929. This yielded $100 million, the equivalent of $1.6 billion today. ^[5]

However, he lost that entire fortune mysteriously and sadly took his own life in 1940 because of depression.

He left behind a book, How to Trade Stocks, and a classic biography, Reminiscences of a Stock Operator, by Edwin Lefèvre.

From Jesse’s trading career, you can note that:

• The value of avoiding others’ trading opinions
• The value of keeping a trading journal to learn from your mistakes and successes
• The value of following your trading rules religiously

#2. William Delbert Gann

William Gann (1878-1955) was a commodities trader who owned a brokerage firm, W.D Gann & Company. ^[6]

He developed his trading strategies at this firm by observing his clients’ mistakes and learning from them.

He is famous for using geometry, astrology and ancient mathematics to predict market movement. Most of his technical analysis ideas and tools were developed into Gann indicators which are used to date. ^[7]

Apart from trading, he taught in seminars and authored a number of trading books and courses. He was also a firm believer that market cycles and patterns repeat themselves.

Some lessons from Gann’s trading career are: 

• You can learn from the mistakes of others
• The market moves in patterns that always repeat themselves

#3. Richard Dennis

Richard Dennis (born 1949), “Prince of the Pit”, is a legendary commodity trader and the teacher behind the Turtle Traders.^[8]

The Turtle Traders experiment was designed to settle a bet between Dennis and his partner William Eckhardt. Dennis believed that anyone could be taught to trade successfully, while William believed it required a special gift.^[9]

As expected, Dennis’s Turtles became a profitable trader, making more than $175 million collectively in just 5 years. ^[10]

He is famed for converting $400 borrowed capital into $200 million in about 10 years back in the 1970s. He was an early success and made his first $1 million at the tender age of 25. ^[11]

Dennis was an aggressive trader who took high risks. This generated gigantic returns but also came with massive drawdowns. He insists on the importance of being able to accept losses both psychologically and physiologically to stay in your A-game.

Some lessons from Dennis’s trading career are:

• Trading psychology is an important factor in your trading journey 
• Risk management is crucial
• It is possible for anyone to learn how to trade

#4 Steven Cohen

Steven Cohen (born 1956) is a successful hedge fund manager, trader and investor. ^[12]

He is the founder and CEO of Point72 Asset Management. He also founded SAC Capital Advisors, one of the most successful hedge funds globally until it shut doors in 2016.

His trading career started at Gruntal & Co. as an options trader. He made $8,000 on his first trading day and went on to make almost $100,000 a day for the firm.

His hedge fund, SAC, generated a decent annual average return of 25% from 1992 to 2013. ^[13]

Some lessons from Cohen in stock trading are:

• You can’t control what the market does, but you can control your reactions to what the market does
• Consider focusing on a single asset class in a single sector. It’s better to know a lot about something than a little about everything 
• You’re going to be wrong a lot, manage your risk well

#5. George Soros

George Soros (born 1930) is undeniably one of the most famous traders of all time. ^[14]

The highlight of his career was in 1992 when he shorted $10 billion worth of British pounds and made a colossal $1 billion profit. This earned him the nickname ‘ The man who broke the Bank of England.

He started his career working in merchant banks in London then moved to New York. In New York, he focused on arbitrage trading European stocks.

Soros founded Soros Fund Management in 1970, one of the most successful hedge funds in the industry. The fund has delivered an annual rate of return of about 20% for over 40 years. ^[15]

The biggest lesson you can learn from Soros’ trading career is the importance of having high belief in your trading decisions.

#6. Ed Seykota

Ed Seykota (born 1946) is a successful commodities trader and private money manager.

He started his trading career in the 1970s where he worked for a brokerage firm. There, he developed one of the first computerised trading systems for money management in the futures market.

He is famed for turning a $5,000 trading account to $15 million within 12 years.^[16]

Some lessons from Ed’s successful trading career are:

• Consider speculating with less than 10% of your liquid net worth and risk only 1% of that on any trade
• Ignore advice from other traders, especially the ones who are ‘sure’ about their trades
• Find a trading style that suits you and set rules that you can follow

#7. Bruce Kovner

Bruce Kovner (born 1945), was one of the biggest players in the forex and commodity markets. Unlike other famous traders who started younger, Bruce started his trading career when he was 32. He had quite a successful career having raked up an annual average return of 87% between 1978 and 1987. ^[17]

He founded Caxton Associates in 1983, and it rose to become one of the world’s most successful macro hedge funds with almost $4 billion assets under management. ^[18]

Bruce retired in 2011 but left some useful gems for traders to learn from such as: 

• Risk is the most important thing to be well understood 
• Under trade as much as possible
• Whatever you think your position ought to be, you may wish to cut it at least in half

#8. Mark Minervini

Mark Minervini (born 1965) is a highly successful stock trader with 38 years market experience. ^[19]

He started trading in 1983 and has generated impressive returns over the years, winning the United States Investing Championship twice. ^[20][21]

From 1994 to 1999, Mark had a compounded total return of 33,554%. That is a 220% compounded annual average return.^[22]
Apart from trading, he’s an author and has written a number of trading books.

The biggest lesson from Mark Minervini is that discipline is the bridge to achieving goals and becoming accomplished.

#9. Mark Douglas

Mark Douglas (1948-2015) is considered the leading author of trading psychology. ^[23]

He rose to fame after publishing two trading psychology books. The Disciplined Trader in 1990 and Trading in the Zone in 2000.

These two books brought to light the vitality of trading psychology to trading success. Trading in the Zone has even been crowned as the Trading Bible by traders.
Mark debunked the belief that trading was as a result of proper analysis. He established psychological management as the key to popular trading.

His most important lesson to traders can be extracted from his five fundamental truths of trading: 

• Anything can happen in the markets
• You don’t need to know what is going to happen next if you have a trading plan or system
• There is a random distribution between wins and losses for any given strategy/edge 
• An edge is nothing more than an indication of a higher probability of one thing happening over another
• Every moment in the market is unique

#10. Paul Rotter

Paul Rotter is undeniably one of the world’s most famous scalpers. He scalped German bond futures which earned him the nickname ‘The Flipper’. ^[24]

He reportedly made between $65 and $78 million annually for 10 years of his career. ^[25]

While learning how to trade, he thought of it as gambling which made him blow his account. It was then that he understood the value of risk management.

One lesson from his trading career is that risk management is an important factor for trading success.

#11. Lawrence Hite

Lawrence Hite (born 1941) is a hedge fund manager, as well as a stocks and commodities trader. He is also an author of The Rule, a book on how he beat the odds in the markets and in life. ^[26]

He co-founded Mint Investment Management Company in 1981. By 1990, it was the largest commodity trading advisor in the world in terms of assets under management. He retired from the firm’s fund manager role in 1994. ^[27]

Some chief trading philosophies that you could learn from him are:

• Trading is a game of probabilities 
• Trading is more to do with odds than any kind of scientific accuracy

#12. Andrew Aziz

Andrew Aziz is a successful stock day trader and a best selling author. ^[28]

Trading was not his primary field, but he turned to it after losing a research scientist job. Since then, he has grown his career as a trader immensely. He’s currently a proprietary fund manager at Peak Capital Trading.

He has also published five best selling trading books and founded Bear Bull Traders, an educational program to train traders.^[29]

One lesson from Aziz’s trading career is that the primary focus for you as a trader is to survive.

Conclusion

Now that you know and have learnt some trading lessons from 12 of the world’s famous traders, hopefully you get a couple takeaways from the above.

Reference