Table of Contents
Boris Schlossberg—co-founder of BKForex with Kathy Lien, former chief currency strategist at FXCM, and a familiar face on CNBC—sits down for a candid interview recorded right after a wild flash-crash session. He walks through his path from Wall Street to currencies, why FX sharpened his macro instincts, and the simple but ruthless truth he trades by: there are only two trades—continuation and reversal—yet the craft is deciding which one to press and how much. It’s honest, practical, and built on decades of screen time and scar tissue.
In this piece, you’ll learn Boris Schlossberg’s real working playbook: why humility beats bravado, how to size when volatility explodes (“twice the vol, half the size”), why hard stops are non-negotiable, and how algos can protect your willpower by enforcing rules when the tape goes nuts. You’ll also see why longer timeframes often crush frantic day trading, how to blend trend and reversal logic without overfitting, and the mindset that keeps you in the game—diversify sensibly, aim for realistic returns, and don’t quit after the inevitable drawdowns.
Boris Schlossberg Playbook & Strategy: How He Actually Trades
Core Lens: Continuation vs. Reversal
Boris keeps the market simple: every trade is either betting that momentum continues or that it snaps back. The edge is choosing the right lens for current conditions and enforcing risk when you’re wrong. Here’s how he frames that decision in practice.
- Label the tape before you trade: “trend day” or “range day” using session high/low and a volatility filter (e.g., ATR(14) > 1.5× 20-day avg = trend bias).
- If trend day: only hunt pullbacks in the direction of the move; skip countertrend fades entirely until ATR normalizes.
- If range day: only fade extremes back to VWAP/weekly pivot; skip breakouts unless range expands > 1.25× the Asian session range.
- Re-tag the day after any macro release or unexpected headline; don’t assume the morning’s regime lasts all day.
Market & Session Selection
He focuses on where tight spreads and flow are active, then aligns tactics to the session personality. This keeps costs low and odds cleaner.
- Prioritize liquid majors/crosses (EURUSD, GBPUSD, USDJPY, AUDUSD, USDCAD, EURJPY).
- Trade London and early New York for momentum/continuation; use late NY/Asia for mean-reversion fades.
- If the 5-minute spread > 1.5× usual, stand down or cut size by half.
- Avoid initiating new positions in the dead zone: the last 30 minutes before a top-tier data release.
Set up Templates: Trend Pullback (Continuation)
When momentum is real, he buys dips/sells rallies into structure—never chasing mid-air. This template keeps you with the move but defines risk tightly.
- Structure: 20/50 EMA slope aligned on 5m and 15m; price pulls back to 20 EMA without 15m close beyond 50 EMA.
- Entry: limit at 20 EMA +/- 0.1× ATR(14) with a confirmation wick in setup direction.
- Invalidation: hard stop 1.2× ATR(14) beyond the 50 EMA or prior swing—whichever is closer.
- Profit: scale 1 at +0.75× ATR, trail remainder behind 20 EMA on closes; exit all on opposite 5m close through 50 EMA.
Setup Templates: Mean-Reversion Fade (Reversal)
On range days, he fades emotional pushes back to value—quick in, quick out. The key is confluence and modest targets.
- Structure: price extends ≥ 2.0× ATR(14) from VWAP with RSI(2) ≥ 95 or ≤ 5 and a prior range-bound London session.
- Entry: stagger limits at 1.6× and 2.0× ATR from VWAP into a known level (pivot/S1/R1/previous high/low).
- Invalidation: hard stop 0.8× ATR beyond the outer limit fill; no averaging after the second fill.
- Profit: first take-profit at VWAP touch; second at the day’s mid; flat before the session close.
Volatility-Based Position Sizing
Sizing flexes with volatility, so a big day doesn’t wreck you. Simple rules prevent over-betting when the tape is wild.
- Baseline risk per trade: 0.5% of account when ATR(14) ≤ its 90-day median; 0.25% when ATR is between 1–2× median; 0.10% when ATR > 2× median.
- “Twice the vol, half the size” is the default; never violate it after a loss.
- Cap total open risk across correlated USD or JPY positions at 1.0% account max.
- If the spread widens beyond normal by 50%+, treat it as added ATR; reduce size accordingly.
Entries, Stops, and Targets—Mechanics
Execution is standardized, so the willpower load is light and slippage is contained.
- Always pre-place a hard stop with the entry; never convert to mental stops.
- Minimum reward-to-risk 1.2R on continuation, 1.0–1.2R on fades (smaller wins, higher hit rate).
- Use bracket orders: entry + stop + two profit targets; trail only the final third.
- If price moves 0.75R in favor, move stop to breakeven minus half the spread.
News & Event Tactics
Data releases create opportunities and traps. The protocol is about staying paid while avoiding coin-flip spikes.
- Flat or half-size within 5 minutes of Tier-1 releases (CPI, NFP, FOMC, ECB/BOE/BOJ decisions).
- Post-release: wait for the first 5-minute candle to close; trade only in the direction of that close for continuation setups.
- For fades, require an exhaustion wick > 1.5× the prior 10-bar average range into a pre-marked level.
- No new trades in the 15 minutes heading into central-bank speeches.
Risk Controls & Daily Loss Limits
Staying in the game outranks being right. These controls make the account survivable under stress.
- Per-day max loss: 1.0% of equity or 3R, whichever hits first—then stop trading.
- Per-week max loss: 3.0% or two losing days in a row exceeding 0.8%—cut size in half for the next three sessions.
- After a stop-out, a mandatory 10-minute timeout, review the tag (trend/range), and confirm it hasn’t flipped.
- No “revenge adds”: never increase size immediately after a loss; next trade must be equal or smaller.
Multi-Pair Portfolio Construction
He thinks in terms of risk buckets, not trade count. That reduces correlated drawdowns.
- Group pairs by driver: USD-majors, JPY-risk, EUR-complex, commodities (AUD, CAD).
- Allow max one position per bucket unless uncorrelated catalysts are present.
- If you’re long USD in one pair, avoid a second USD-long unless its setup expectancy is ≥ 1.5× the first.
- Track rolling 20-day correlation and cut exposure if |ρ| > 0.7 across open positions.
“Guardrails” with Light Automation
Rules beat moods. Lightweight automation enforces entries/exits and throttles churn.
- Use alerts that auto-stage bracket orders at pre-defined EMA/VWAP/ATR prices; click-to-confirm only.
- Auto-cancel unfilled limits after 20 minutes or when the regime tag flips.
- Trailing stops update only on bar close to avoid noise; never tick-based.
- Log every algorithmic change like you would a trade—time, reason, expected impact.
Trade Review & Journaling
He separates “good trade, bad outcome” from “bad trade, lucky outcome.” The journal drives small weekly improvements.
- Tag each trade: setup type, regime (trend/range), catalyst, and mistake category (late, oversized, rule-break).
- Snapshot the chart at entry/exit with EMA/VWAP/ATR visible; write one sentence on why future-you would skip or press harder.
- Weekly audit: drop the worst-performing bullet rule or tighten its trigger; add nothing new until a full week is green.
- Track expectancy per setup monthly; retire any template with a negative expectancy over 40+ trades.
Scaling Up & Drawdown Repair
As size grows, he scales cautiously and repairs damage methodically.
- Only scale after 20R of net profit in the last 90 days; increase risk per trade by 25%, not more.
- During drawdowns > 5%, reduce risk to 50% baseline and trade only the highest-expectancy template.
- Stop trading Fridays if the week is red by Thursday’s close; resume Monday with half-size.
- No compounding mid-week—adjust size only at the weekly reset based on equity.
Practical Checklists Before Clicking Buy/Sell
Short, repeatable checks avoid dumb errors and keep performance consistent.
- “TAG” check: Trend or Range? Aligned across 5m/15m?
- “COST” check: Spread normal? Commission impact < 10% of target?
- “SIZE” check: ATR bucket correct? Correlation cap respected?
- “EXIT” check: Hard stop placed? Targets/risk ≥ rule minimums?
- If any box fails, skip the trade and re-assess after the next bar close.
Size positions by volatility; survive turbulence with automatic cutbacks
Boris Schlossberg stresses that edge dies when size is wrong, so he makes volatility do the sizing for him. When ATR is quiet, he’ll allow normal risk; when ATR doubles, he cuts risk in half—no debates, no “feel.” He wants the same emotional temperature on calm and crazy days, and the only way to get that is to let volatility throttle position size. By scaling down automatically in stormy markets, he stays liquid, flexible, and ready to take the next high-quality shot.
In practice, Boris Schlossberg ties stop distance to ATR and then back-solves position size so the dollar risk stays constant. If spreads widen or slippage ticks up, he treats that as effective volatility and trims size again. He caps total correlated exposure when multiple pairs are driven by the same macro theme to avoid getting doubled up by one headline. The mantra is simple: twice the vol, half the size—protect the account first, and the profits follow.
Trade continuation on trend days, fade extremes on range days.
Boris Schlossberg starts by tagging the day: is it pushing in one direction or ping-ponging between levels? If momentum is clean and ranges are expanding, he ignores countertrend temptations and looks only for pullbacks in the direction of travel. He wants the first clean dip to a moving average or prior breakout, not a late chase. This keeps him aligned with flows and reduces the number of decisions he needs to make.
When action compresses and price keeps returning to value, Boris Schlossberg flips the lens and fades stretched moves back to VWAP or the session midpoint. He waits for exhaustion—fast spikes into a known level—then takes modest targets instead of hunting home runs. The goal is high repetition with tight risk, not hero trades. If the regime changes mid-session, he stops and re-tags before placing another order.
Use hard stops and bracket exits; remove willpower from execution.n
Boris Schlossberg insists the stop must be placed the moment the order goes in—no exceptions, no “mental stops.” He treats the stop as a price of information: once the market proves him wrong, he pays it and moves on. Bracket orders handle the rest by pre-setting profit targets alongside the stop, so he isn’t negotiating with the tape mid-trade. This structure keeps Boris Schlossberg calm because every scenario is scripted before the first tick.
He also scales out automatically to lock gains and reduce the chance of a full round trip. If the price moves favorably, the stop is advanced mechanically to cut risk without emotion, and only the final piece trails for a larger win. Slippage and spread jumps are treated as execution risk, so his brackets include a small buffer to avoid accidental stop-outs. Boris Schlossberg’s view is simple: automate the exits, and your discipline survives even when your mood doesn’t.
Diversify by currency driver, and cap correlated exposure across pairs.
Boris Schlossberg doesn’t count trades; he counts drivers. He groups pairs by what moves them—USD policy, JPY risk sentiment, EUR politics, or commodity demand—and limits himself to one clean idea per bucket. If he’s already long the dollar via EURUSD, he won’t pile into USDJPY long unless the second setup clearly earns its keep. This stops one headline from wrecking multiple positions and keeps Boris Schlossberg’s equity curve smoother.
He also watches rolling correlation and trims exposure when pairs start marching in lockstep. When in doubt, he offsets with a cross (e.g., EURJPY instead of stacking EURUSD and USDJPY) to express the view without doubling risk. In major events, he cuts total book risk across linked pairs so a surprise doesn’t hit from three angles at once. Boris Schlossberg’s rule is blunt: diversify by cause, not by count.
Review each trade’s expectancy; tweak rules weekly, never chase losses.
Boris Schlossberg focuses on expectancy, not ego. After every position, he logs setup type, regime, risk, and outcome to see whether the rules are actually paying. If a template runs negative over a meaningful sample, he prunes or tightens it instead of hoping the next trade saves it. This keeps Boris Schlossberg anchored to math, not mood, and stops him from drifting into discretionary chaos.
Each week, he makes one small improvement—tighten an entry filter, raise a minimum R, or shorten a trailing stop—and then leaves it alone for a full week. He treats drawdowns with a protocol: cut size, simplify to best setups, and forbid “get-it-back” trades. If he breaks a rule, the journal flags it, and the next session starts with a reduced size as a penalty. By measuring, tweaking lightly, and refusing to chase, Boris Schlossberg lets statistics do the heavy lifting while emotions take the back seat.
Boris Schlossberg’s core message is ruthlessly simple: the market only gives you two trades—continuation or reversal—so your job is to tag the day, pick the right lens, and size so you can survive being wrong. He leans into structure and discipline over prediction: hard stops go in at entry, targets are set before the first tick, and the plan doesn’t bend just because price wiggles. When volatility spikes, he doesn’t “tough it out”—he cuts size and widens stops proportionally so one wild session can’t undo months of work.
He treats conditions, not opinions, as the boss. On trend days, Boris Schlossberg buys pullbacks and ignores countertrend bait; on range days, he fades stretches back to value and keeps targets modest. He groups positions by driver to avoid doubling the same macro bet across multiple pairs, and he checks correlation so one headline can’t hit from three angles at once. Most of all, he manages his energy: pre-planned brackets and standardized rules strip out willpower battles so execution stays clean.
The mindset glues it all together. Big wins aren’t the point—durability is. Boris Schlossberg’s process asks the same questions every time: what regime are we in, how volatile is it, what’s the defined risk, and where does the trade stop being valid? If those answers are clear, he takes the shot; if not, he waits. That patience, plus volatility-based sizing and uncompromising risk controls, is the “secret sauce” that keeps him in the game long enough for the edge to compound.
