Trader's Memoir: I Made a 100% Profit on PEPE Using Soros' Method

"We should invest 200% of the funds into this trade, rather than 100%."

Written by: Leo

Compiled by: Luffy, Foresight News

The art of speculation can be summed up in two points: how much you can earn when you're right and how much you can lose when you're wrong. Everyone reflects on those trades they were certain would be a big win, questioning why their position was so light; similarly, they look back on those hesitant trades, wondering why they kept adding to a losing position.

Position management is one of the hardest skills to master, but improving this ability is the most effective leverage. All top traders are constantly exploring how to enhance it, because once a misjudgment occurs, the consequences can be unimaginable. Although I have many shortcomings in execution, position management is one of the best things I've done in my career, compensating for many other mistakes I've made.

One of my favorite stories is the one told by Stanley Druckenmiller and George Soros about "decisively increasing bets in asymmetrical opportunities," as they are the most outstanding fund managers.

In 1992, Druckenmiller served as the chief portfolio manager at Soros's Quantum Fund. Druckenmiller noticed that the Bank of England was artificially supporting the pound and firmly believed that this support would not last long. He approached Soros and explained his viewpoint.

"George, I am going to sell 5.5 billion dollars worth of pounds tonight and buy German marks, which means we are going to bet 100% of the fund's capital on this trade."

As I was speaking, he began to frown, as if to say what was wrong with this kid, and I felt he was about to refute my argument. He said, "This is the most absurd method of capital management I have ever heard. What you are describing is an unbelievable one-way bet."

We should invest 200% of the funds in this trade, not 100%. Do you know how often this happens? About once every 20 years. What's wrong with you?

Druckenmiller ultimately executed this trade with a doubled position, which later became one of the most famous trades in history, yielding a profit of $1 billion in a single day. Soros even earned the nickname "the man who broke the Bank of England" because of it.

The most profitable trade I've made so far was a swing trade when Coinbase and Robinhood announced the listing of $PEPE in November 2024. While executing the trade, I couldn't stop thinking about this legendary story, wondering, "What would Soros do?"

Around 6 a.m. that day, I was sitting on the toilet as usual, scrolling through my phone, checking group chat messages, monitoring Twitter updates, and observing charts. At that time, I had already taken a small long position on $PEPE because the charts looked great, and my intuition urged me to buy, but the position had already suffered a significant loss, which made me a bit anxious.

I was intently staring at the 1-minute K-line chart of the trading app when suddenly I saw a huge green candlestick shoot up, and I instantly broke even. Obviously, I was a bit excited but also very confused, then I received a Twitter notification: "PEPE is listed on Robinhood." I was still doubting whether this was real news because it was so unexpected, so I checked multiple sources in the group chat and on Twitter. When the news was confirmed to be true, a switch in my mind was triggered, realizing this would be "that once-in-a-lifetime trade."

As soon as the Robinhood news was released, its price skyrocketed from $0.000012 to $0.000016 in an instant. This news is particularly noteworthy because since $DOGE and $SHIB, no other memecoins have been listed on Robinhood. Moreover, PEPE previously had no convenient purchasing channels in the U.S.; Americans either had to buy it on-chain or through unknown exchanges. Listing on Robinhood opened the floodgates for a large amount of retail funds for PEPE, and the market quickly understood this.

Background: At that time, the historical highest price (ATH) of $PEPE was 0.000017 USD. One of my favorite trades is breaking through historical highs, and I realized that those selling at this price didn't understand the significance of this news at all.

I bought 5 times the amount of the current position at market price, using almost 2 times the leverage of the entire portfolio to go long (position size = 2 times the value of the portfolio). I looked at the dollar value on the trading app and felt a wave of nausea in my stomach; if I had eaten breakfast, I would definitely have thrown up. I never even thought about investing so much in altcoins, let alone meme coins, but I felt very calm inside because I knew it was the right choice.

About an hour after the Robinhood news release, Coinbase also announced the listing of $PEPE, which broke its historical high. Later that day, Upbit listed $PEPE, pushing the price to $0.0000255. I didn't even dare to look at the trading app because the fluctuations in profits and losses were too large, which would affect my mood. At the peak, I made about a 100% profit in less than 12 hours. It was indeed a crazy day. Although I didn't close my position at the highest point, I still locked in considerable profits that exceeded the total profits of the past few months, which also highlights the value of adjusting positions in asymmetrical opportunities.

These are stories of heavy positions that have succeeded, but it would be a crime not to mention the other side. Behind every successful story of large-scale centralized betting, there are countless tales of people who went all in and ultimately went bankrupt. This is exactly why investing correctly is so difficult: finding a balance between believing in your theory and making bold bets, while respecting the market, is not easy.

Sometimes you are full of confidence and heavily invested, but after several days of losses, you decide to cut your losses and exit. Strangely, it seems as if the market god is watching your position; after you close your position, the market immediately reverses, and the price moves exactly as you predicted. Yet at times, you choose to hold on, only to wake up a week later to find your portfolio down 50%. There's no denying that this is a skill that's hard to master.

I have personally had many experiences of heavy losses, but one thing that has kept me going is very strict risk management. If the price movement does not align with my theory and the losses continue for a period of time, I will cut my losses. No matter how confident I am, the market is always right.

Never cling to losing trades; better trades are just around the corner. There will always be plenty of opportunities and trading ideas worth going all in on, but if I've lost a significant portion of my portfolio, I won't have enough capital to seize the best opportunities.

Avoiding significant losses at all costs is indeed the most important concept in any risk game. What "significant loss" means to you is relative. During my early process of building a smaller portfolio, I had to take on greater risks. I would easily bet 10-15% of my portfolio on high-conviction trades, as that was the nature of the market I was in. Everything on-chain is extremely illiquid and highly volatile, so I had to accept greater drawdowns to validate my theories. As my portfolio size increased, the liquidity of the markets I entered improved slightly, and I couldn't afford to take on such large risks. It is crucial to clarify your risk tolerance so that every time you trade, you clearly know how much loss you can bear. I have seen many talented and amazing traders exit the game due to an irretrievable massive loss.

That's why one of my favorite trading strategies is breakout. I like top attacks because it's a clearly defined risk trade, either profitable or quickly failing. For example, the timing of my trades on $PEPE is when the price struggles at a high level, failing to break through, or after breaking through, falls back below the ATH. In both cases, I have clear exit points, so it's very reasonable to build a large position at this level.

Looking back at my trading career so far, all significant growth in my portfolio has come from "all-in" returns. Each year, only a few trades account for the majority of the profits. Beyond that, it really is a survival game. You must stay sharp enough to identify those trades that can bring huge returns, but also be disciplined to avoid losing all your chips on ideas lacking confidence, and to refrain from doubling down on losing positions.

In the next phase of my life journey, one major area I focus on improving is position holding. I excel at making heavy bets, but I am very poor at holding positions when there are large unrealized profits. This is my inner risk management awareness at play, but if I could apply my theories more often instead of frequently trading, I would go further.