With an estimated net worth of $3.1 billion, Stan Druckenmiller is widely considered one of the most successful hedge fund managers of all-time. 

Source: TheLeapTV

While working for George Soros between 1988 and 2000, Druckenmiller cemented his reputation making huge speculative bets on macroeconomic trends. In 1992, he made his most famous trade, taking a $10 billion short position -- betting the value will fall -- against the British Pound. When the Pound crumbled on what would be referred to as "Black Wednesday" Soros' fund walked away with a cool $1 billion in profit. 

Overlapping his work with George Soros, Druckenmiller also ran his own hedge fund. From 1986 until he retired in 2010, Duquesne Capital averaged 30% returns and never had a down year. 

For investors that want to amp up their investing returns, here are 5 tips from this legendary hedge fund investor.

5. Have a strategy
Druckenmiller was a whale hunter, always on the lookout for the next big opportunity. To find these monster investments he focused on understanding and speculating how emerging trends would impact different stock market sectors, bonds, currencies, and commodities. 

While making huge speculative bets is often best left for the professional investor, the sentiment is what's important, namely: "have a strategy." For Druckenmiller it was looking for high risk high return investments; for you it may be undervalued stocks, dividend stocks, a combination, or something else, but the key is to know what you're looking for and you won't miss it when you see it. 

4. Always look ahead
When learning and researching about a company for the first time, there are great benefits to looking back at a company's past results. Get stuck in the past, however, and investors will often find themselves in hot water for defying the oldest rule in investing, "past results are not indicative of future returns." 

So, when it comes time to buy, Druckenmiller encourages investors to avoid thinking about the past and the present, and instead "try and imagine the world 18 to 24 months from now."   

3. When you're right, go big
"I like putting all my eggs in one basket, and then watching the basket very carefully." 

Most novice investors could drastically improve their returns by practicing extreme diversification -- or buying and holding an S&P 500 index fund over a long period of time. For those of you looking to beat the market, however, Druckenmiller suggests building a smaller portfolio and sticking to the investments you have the most conviction in. 

While Druckenmiller is no longer a hedge fund manager, he still manages his own money under "Duquesne Family Office LLC." As of the company's most recent filings, roughly 55% of the equity portfolio – which is valued at $1.4 billion – is invested in his top 10 holdings. 

2. Diversification
With the majority of his equity portfolio tied up in his top few holdings, Druckenmiller is far from the poster child for diversification -- but, as the chart below shows, among those holdings he covers several market sectors. 

Source: Whalewisdom.com

While Druckenmiller certainly favors technology -- with hefty investments in companies like Google and Facebook -- there are few sectors of the market he completely avoids. It's Druckenmiller's depth of knowledge that, ultimately, makes him such a successful investor. He understands that it's a big market out there with tons of opportunities, and the more sectors you're willing to explore, the greater your chances of finding homeruns. 

1. When you're wrong, get out
In your quest to find great investments you will occasionally -- like Druckenmiller In 1987 -- strikeout. 

Druckenmiller changed his short position against the stock market, to a long position – or, betting it would increase in value. The next day, October 19, 1987, the stock market crashed. Immediately realizing he was wrong, Druckenmiller liquidated his position. 

No matter how confident you are, you're going to make bad investments -- and accepting this unpleasant truth is all part of the game. The key is having a depth of knowledge about the companies you're investing in. That way you can tell the difference between general market volatility, and a business that isn't what you thought it was. If you're truly wrong, be decisive and cut your losses.

Dave Koppenheffer has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google (C shares). The Motley Fool owns shares of Facebook and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.