What's up, everyone and Welcome to our video on the three investment and trading rules from Ray. Dalio. So if you don't know who Ray dalio already is he's an American billionaire investor a hedge fund manager and a philanthropist and most people who know who radio is other people who know where it came from. So he's the founder of the investment firm Bridgewater Associates. And this is one of the world's largest hedge funds with over 124 billion dollars in assets under management. So jumping straight into the investment rules. The first rule de Leo mentions is diversification. You need to diversify now while diversifying your Investments may sound obvious de Leo takes on the subject. It has to be specific and unique. So his diversification strategy is based on the principle of reality being realistic and this principle teaches you to always see the world for what it is and not what you wish it to be. So in investing the reality is that many of your investment choices. They're going to be pretty bad. They're going to have dual returns and they might actually lose you money many investors. They don't actually see the truth when it's choosing their Investments. And what happens is they start to become delusional about the worth of that particular Investments and their investment choosing abilities. So they think they're really good at choosing Investments than their ego gets in the way and even with radio Leo's massive research team. He still does not know what the future Future holds that is the reality and that's that concept of diversifying. Now this reality forces the diversification rule to be critical for long-term investment success and specifically Ray daily or mentions that it takes 15 uncorrelated Investments to reduce the risk factor by 80% and what he specifically mentions is I think the important thing here if I'm an investor, is that the important You can have is an excellent strategic asset allocation mix he then goes on to say in other words. You're not going to win by trying to get what the next tip is. What's going to be good or what's going to be bad you're actually going to lose. So what the investment needs to do is have a balanced structured portfolio. Now a portfolio that does this does well in different environments now investors can diversify across and within asset classes or across different geographies different currencies and Skits and even time so what we can take away from this as Forex Traders is not funneling all your ideas based on one currency Trader. And what about what I mean by this is if you're limiting yourself to one trade at a time, not only are you concentrating your risk on that trade, but you're not allowing yourself to diversify your overall portfolio to reduce that risk factor as daily inventions. So daily has next primary investment rule is to balance your portfolio based on inflation risk and Sharon has a considerable impact on financial markets knowing how to optimize your portfolio regardless of inflationary shifts is actually a key component to consistent returns over time. So once again that principle of reality comes back daily, it does not try to predict the deflation there or inflationary pressures, but rather he likes to view the economy in its current economic environment and understand what's causing this and only then can he create that balance portfolio so direct quote from from daily or summarizes is real really well, which is bonds will perform best during times of disinflation recession stocks will perform best during periods of growth and cash will be the most attractive when money is tight. So all asset classes have environmental biases and they do well in certain environments and then do poorly and others. So basically as Forex Traders you want to understand what's driving inflation, whereas it tending and how it's going to affect the currency and if Interested in how to applies to Forex you can actually sign up to the lodge effects Academy. The link will be in the bayou. It's one of the many factors we cover in our overall trading model. So going back to the rules. It brings us nicely into rule number three, which is learn what moves interest rates a famous quote from Radio is that it all comes down to interest rates as an investor. All you're doing is putting a lump sum payment for future cash flow and the big question is when will the term should Church of interest rates change now. That's the question to be worried about he who lives by the crystal ball in trying to forecast interest rates will eat shattered glass. And in other words, you're not trying to predict interest rates rather you need to understand their structure and why they move so again, if you're unsure of how to apply interest rates to your analysis and how they work in general. This is completely covered in our Academy. Our whole model is based on that Global macro approach to Forex. So if you're interested in that, don't forget to sign up below So thanks for watching. That's our video Don't on radios trading principles and rules. 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Ray Dalio is known as one of the worlds best traders, the founder of the fund bridge water associates and an author of a very successful book "principles". In this video we cover the 3 rules Dalio believes are a key component traders need to understand. As you may know there's a massive knowledge gap between retail traders and professionals and we're looking to tackle this by picking away at the top traders and providing useful bites of information which can be applied to your own methods. 