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These rules were taken from the book "High Probability Trading Setups For the Currency Market": The book was authored by Kathy Lien and Boris Schlossberg of BKForex: http://www.bkforex.com Discuss this with us InformedTrades: The five rules discussed in this video are as follows: 1. Never risk more than 2% per trade, because big drawdowns require disproportionately large returns to get back to breakeven 2. Use fundamental analysis to identify currency pairs and the direction to trade them in, but use technicals to precisely enter and exit 3. Look to sell weak currencies and buy strong currencies 4. Understand the difference between scaling and adding to losers -- the main difference is that smart scaling involves always knowing the maximum loss one is exposed to 5. Risk is pre-determined, but reward is unpredictable. In other words, when you enter your trade, you should know exactly how much you are risking -- i.e. how much you will lose if the trade goes against you. Profit, however, is more unpredictable, as you often benefit from riding trends to their fullest and thus having an exit strategy that depends on how price is behaving after you enter.