RISK DISCLAIMER
HIGH RISK INVESTMENT
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade Forex you should carefully consider your objectives, financial situation, needs and level of experience.
The idea of margin trading is that your margin acts as a good faith deposit to secure the larger notional value of your position. Margin trading allows traders to hold a position much larger than the actual account value. Trading on margin comes with risk as leverage may work against you as much as it works for you.
The possibility exists that you could sustain a loss in excess of your deposited funds and therefore, you should not speculate with capital that you cannot afford to lose.
You should be aware of all the risks associated with trading on margin. We recommend you seek advice from an independent financial advisor.
INTERNET TRADING RISKS
There are risks associated with utilizing an internet-based deal-execution trading system including, but not limited to, the failure of hardware, software, and internet connection. Since we do not control the internet infrastructure, configuration of your equipment or reliability of its connection, we cannot be responsible for communication failures, distortions or delays when trading via the internet. We employ backup systems and contingency plans to minimize the possibility of system failure. You should make sure you have an alternative way to communicate with your broker to place orders in case you need or wish to do so.
In order to reduce some of the Internet Trading Risk you may consider using a VPS service or for even greater reliability a dedicated server. Using VPS or a dedicated server will not remove completely the Internet Trading Risk.
SYSTEM MALFUNCTION
We continuously perform tests of our systems and maintain backup but we cannot guarantee that no failure may occur. We recommend you to test in advance forced disabling of the communication between any part of our infrastructure and your systems or systems of your brokers. Also you are recommended to check what effect on the performance of the system overall may have any change of the credentials you use for any component of the system. We recommend you have and maintain at easy access a procedure for change of your credentials for any component of the system.
DELAYS IN EXECUTION
Delays in execution may occur for various reasons, such as technical issues with the internet connection; a delay in order confirmation from a broker; or by a lack of available liquidity for the currency pair that you are attempting to trade.
ROLLOVER
Rollover is the simultaneous closing and opening of a position at a particular point during the day in order to avoid the settlement and delivery of the purchased currency. This term also refers to the interest either charged or applied to a trader's account for positions held overnight. The time at which positions are closed and reopened, and the rollover fee is debited or credited, is commonly referred to as Trade Rollover (TRO).
LIQUIDITY
During the first few hours after the open and around rollover, the market may experience limited liquidity. Less liquid markets may cause the spreads to widen. In illiquid markets, traders may find it difficult to enter or exit positions at their requested price, experience delays in execution, and receive a price at execution that is significantly less favorable then the requested rate. Some currency pairs may suffer liquidity shortage much greater than the most popular pairs to the extent it might be impossible to exit positions. Some brokers stress the fact that Limit Entry and Limit orders guarantee price but do not guarantee execution. You should consult and understand the policies of your broker.
WIDENED SPREADS
There may be instances when spreads widen beyond the typical values especially as a result of reduced, or lack of available liquidity. It is not uncommon to see spreads widen particularly around rollover. Spreads may widen substantially during news events. Widened spreads may cause a margin call.
SLIPPAGE
Our systems are designed to pass the trade signals with minimum latency to assure all orders are filled at the requested rate. However, there are times when, due to an increase in volatility or volume, orders may be subject to slippage. Slippage most commonly occurs during unexpected news events or periods of limited liquidity or during trade rollover.
HANGING ORDERS
During periods of high volume, hanging orders may occur. This is a condition where an order is in the process of executing but execution has not yet been confirmed. Sometimes an order may become inaccessible buy our system. You are recommended to verify several times a day, especially after rollover if the orders placed with your broker reflect the orders transmitted by our systems. In case of a discrepancy you may need to manually delete some orders.
Keep in mind that it is only necessary to enter any order once. Multiple entries for the same order may inadvertently open unwanted positions.
INVERTED SPREADS
When you trade Forex with a broker using a No Dealing Desk execution model, you are trading on price feeds that are being provided by multiple liquidity providers. In rare cases, these feed can be disrupted. This may only last for a moment, but when it does, spreads become inverted. During these rare occasions the prices are not real and your actual fill may be many pips away from the displayed price.
REVERSE TRADES
Please bear in mind that many brokers reserve the right to reverse any trade.
HOLIDAY/WEEKEND EXECUTION, OPEN GAP, WEEKEND RISK
Please consult the open or close times of your broker. Please pay attention to the policies of your broker related to placing and execution of orders around open and close time and during weekend.
Sunday's opening prices may or may not be the same as Friday's closing prices creating a gap. The market may gap if there is a significant news announcement or an economic event changing how the market views the value of a currency. In order to hold positions or orders over the weekend you should be fully comfortable with the potential of the market to gap. You may consider closing of orders and positions ahead of the weekend and disabling the transmission of the orders by our systems during time shortly prior to the market closure and during the opening of the market.
MARGIN CALLS AND CLOSE OUTS
Close outs (liquidation of all your positions) are executed by your broker in case of a margin call. Margin call may be pronounced or not. Margin calls are triggered when your usable margin falls below zero. This occurs when your floating losses reduce your account equity to a level that is less than your margin requirement. Therefore, the result of any margin call is subsequent liquidation and in some cases may require you cover any loses exceeding your initial deposit.
It is strongly advised that clients maintain the appropriate amount of margin in their accounts at all times.
A close out, may or may not disable transmitting of the orders by our systems. You need to carefully consider the issue and apply proper user settings of our system.
PRICING DISCREPANCIES
It is important to understand the spot Forex market lacks a single central exchange where all transactions are conducted, each Forex dealer may quote slightly different prices.