Background
Bill Lipschutz is the 'Sultan of Currencies' — he generated over $300 million in profits for Salomon Brothers' forex desk in the 1980s. Later founded Hathersage Capital Management, one of the largest currency-focused hedge funds. He's considered one of the greatest forex traders in history and is featured in New Market Wizards.
Core Methodology
Lipschutz trades currencies based on understanding global capital flows, central bank policy divergences, and cross-border investment patterns. His approach is fundamentally-driven but with precise technical timing. He emphasises understanding why money moves between currencies — interest rate differentials, trade imbalances, capital account flows — rather than relying on chart patterns alone.
Key Trading Rules
- Understand the macro drivers: interest rate differentials, current account balances, capital flows, central bank policy
- Use technical analysis for timing, not direction — fundamentals determine direction
- Carry trade logic: buy high-yielding currencies funded by low-yielding currencies when risk appetite is positive
- Size based on conviction and risk/reward — larger positions for higher-conviction setups
- Manage risk asymmetrically: risk small amounts to make large amounts
- 24-hour market means risk management never stops — always know your exposure
Key Concepts
Books & Resources
New Market Wizards interview by Jack Schwager. Hathersage Capital Management research. Various currency trading conference presentations.