Photo by Maxim Hopman on Unsplash
 

For some, swing trading can be one of those risky topics that seem impossible to both understand and profit from. There are risk-loving masters of swing trading. Of course, everyone has their own favorites, but there is no doubt that we must acknowledge the names that have made a name for themselves in history with their huge returns and unpredictable moves. One name that comes to mind is George Soros, with a move that could even affect a country's economy.
 

Why George Soros?

George Soros stands out as one of the most renowned traders in history, with his noteworthy venture against the British Pound in 1992 standing as an iconic trade. Soros saw the British Pound overvalued relative to other currencies and predicted the UK government's incapacity to sustain it. He predicted a devaluation, weakening the Pound against major currencies.

This idea led Soros to borrow billions of Pounds and exchange them for other currencies to take a large short position. He believed the Pound would depreciate, allowing him to buy it cheaper and profit.

The scale of Soros' short position, equivalent to selling $10 billion worth of Pound Sterling, induced panic in currency markets, prompting the Bank of England to intervene by purchasing Pounds to stabilize its value. Despite these efforts, Soros and other speculators persisted in selling, eventually forcing the devaluation of the Pound.

Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.

George Soros

Soros made nearly $1 billion on this wager, while the Bank of England spent a lot buying Pounds to maintain the currency. One of the most successful deals in history, Soros' bet against the Pound, is often used to demonstrate currency speculation.

Furthermore, Soros' trade against the Pound serves as an illustrative example of swing trading. He held his position for months, swing trading, waiting for the Pound to drop. Soros and other swing traders keep holdings for long periods, hoping for large market fluctuations that might generate profits. Soros' winning bet against the Pound shows his ability to spot a currency market trend and keep his position until it benefits him.

Even though the Soros's choice was based entirely on his financial and strategic skills, there are numerous more examples of people who have achieved similar levels of success. Do not forget to browse our compilation of the most successful swing traders.

More By This Author:

Interpreting Market Sentiments: Understanding The Fear And Greed Index
SEC Approves ETFs – Will Expectations Soar Or Stumble?
Leveraged Trading: Assessing The True Risks