THE # 1 SECRET TO TRADING SUCCESS

IF YOU IGNORE THE PRINCIPLES BELOW,

YOU ARE DESTINED TO LOSE MONEY (LONG TERM).

REGARDLESS OF YOUR LEVEL OF SKILL.

AND REGARDLESS OF THE STRATEGY YOU USE.
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LONG TERM THERE IS NOTHING MORE IMPORTANT THAN POSITION SIZING.

THIS IS WHY THE LARGEST AND MOST PROFITABLE INSTITUTIONS

IN THE WORLD PLACE ENORMOUS EMPHASIS ON
THEIR POSITION SIZING PROTOCOLS:

We STRONGLY RECOMMEND that you risk as little as possible on each trade. And below you will find a full explanation
as to why taking the smallest risks possible is so critically important to your success.

Remember, the goal here is to make thousands and thousands of pips per year. Without ever taking any large risks.
And as you read the rest of this document, keep in mind that our most successful clients, who are making thousands
of pips each month, are risking only between 0.20% and 0.30% per trade. With many clients risking as little as 0.10%
per trade.

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NO ONE (NOT EVEN THE LARGEST INSTITUTIONS) CAN PRECISELY PREDICT “BLACK SWAN” EVENTS.
THEREFORE, YOU MUST ALWAYS PROTECT YOUR CAPITAL AGAINST DRAMATIC, UNEXPECTED SCENARIOS.
BECAUSE AT ANY GIVEN MOMENT, A LARGE SCALE EVENT CAN OCCUR, THAT NO ONE WAS EXPECTING.

We have been in business since 1995. And this was the same year that Barings Bank collapsed. If you are not familiar
with the story of Barings Bank, we recommend that you look into it. As it is quite an interesting story. And there is even
a major motion-picture (“Rogue Trader”) that is based on that series of events.

Since then, we have personally witnessed a multitude of dramatic market swings (both up and down) that have served
as very valuable lessons for ourselves and for our clients. Including numerous large-scale events that have sent shockwaves
throughout the financial markets. Events that have caused unprecedented volatility. And have led to significant losses for
numerous institutions, as well as individual investors around the world.
Here are just a few of these large-scale, “Black Swan” types of events:

- Asian financial crisis (1997)

- Default of the Russian government (1998)
- Collapse of LTCM (1998)
- Dot.com collapse (2000-2002)
- Terrorist attacks of 9/11
- Housing and Banking crisis (2008-2009)

Again, these are just a FEW of the biggest events that have rattled the financial markets in the last 25 years.
And there have also been numerous other geopolitical events, central bank interventions, natural disasters,
flash crashes, armed conflicts, debt crisis and more. That have all affected the markets in a variety of ways.

All of these experiences have taught us humility and respect for the market. As we know (first-hand) that
there are no guarantees in the market. And that anything can happen at any time.

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OUR MOST RECENT EXPERIENCE IN THESE HIGHLY TURBULENT SCENARIOS:

We (our company) were actually sitting on open trades when the SNB conducted their two separate interventions
in 2011 and 2015. And the intervention that they did in 2015 was especially harsh. As it was BY FAR the most
volatile event in the history of the currency markets.

Large banks and hedge-funds around the world lost BILLIONS in a matter of hours. Including Citigroup, Barclays
and Deutsche. And several large retail brokers went completely broke, because of that event. Not to mention the
MILLIONS of smaller traders (and institutions) around the world that lost money that day.

And many of these people lost so much money that they were NEVER able to recover.

But thanks to some incredible work by our team, we were positioned perfectly when it happened. And we actually
MADE MONEY that day. Not only were we properly hedged, but we also had hard stops on all of our positions.
This was NOT because we can ‘predict the future’. And this was NOT because we have any ‘secret information’.
The reason we fared so well during this event, was because we are ALWAYS prepared for the worst case scenario.
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IN ADDITION TO THE POTENTIAL FOR CATASTROPHIC, BLACK SWAN EVENTS,

YOU MUST ALSO DEAL WITH THE INEVITABILITY OF STATISTICAL PROBABILITIES:

To a very large extent, wins and losses are often-times a matter of simple statistical distribution.

There will be winning days and there will be losing days. Just like there will be winning streaks and there will be losing streaks.
And this applies to EVERY STRATEGY IN THE WORLD. Simply because of the (unavoidable) mathematical probabilities involved.

Therefore, you must always keep in mind that losing trades are ABSOLUTELY NORMAL and you have to expect that they WILL
happen. You must be mentally prepared for this, so that you don't become overly concerned the first time you have a losing
week. Or when you have three losing weeks in a row.

Losses will happen, this is to be expected and this is nothing to be overly concerned about.

Remember that the goal here is to be profitable, long term. And as long as you remain disciplined with your position sizing,
then you will be just fine. But it is impossible to know exactly what will happen with any given trade. Or in any given month.
So you must go into your trades (every single trade) assuming that this COULD be the beginning of an inevitable losing streak.
And trade small enough, just in case things go against you for a number of consecutive trades.

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FINAL AND MOST IMPORTANT MESSAGE:

Proper position sizing and risk controls are CRITICAL to your long term success. Therefore, we STRONGLY RECOMMEND
that you remain disciplined and always adhere to the following guidelines:

1) Risk as little as possible on each trade. And we STRONGLY RECOMMEND between 0.1% and 0.3% risk per trade.

2) Remain disciplined with your stops and NEVER martingale (double up) after a losing trade.

3) NEVER trade with money that you cannot (realistically) afford to lose.

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We sincerely hope you find this information helpful for your long-term trading development. And do not hesitate
to contact us if you have any questions about any of this.

We are always here to help.

Support Team

ScorpionFX.com

Support@ScorpionFX.com