Investment results obtained in prior periods may not be a guarantee of income in the future.
Trading operations on the financial markets with leveraged financial instruments offers great opportunities and allows investors willing to take risks to get higher returns, but it carries a potentially high risk of loss. So before you start trading you should take a responsible approach to the issue of selecting an appropriate investment strategy in the light of available resources.
This short notice does not disclose all the risks associated with investments in financial instruments using a margin loan. If you have additional questions, please contact TeleTrade consultants.
NOTICE OF RISKS
The purpose of this Notice — is to provide a wide range of stakeholders overall, but perhaps more complete information about the risks that may arise in connection with the transactions in the Forex market and other financial markets, as well as to warn about possible losses for the implementation of the financial instruments Forex and CFD.
Please note that due to the diversity of situations that arise in the financial markets, including forex, list of risks in this Notice is not exhaustive and does not disclose all the risks associated with investing in financial instruments in the Forex market and CFD.
- Investment activity in financial instruments Forex and CFD, has high degree of risk, as it involves transactions with leverage and may lead to loss of not only the expected income from invested funds, but also to the losses of the invested funds. For the purposes of this Notice at risk in operations with financial instruments Forex and CFD mean the possibility of an event entailing or capable entail a loss of revenue or loss of invested Client’s assets.
- This Notice is not intended to force the customer to refuse transactions in financial instruments Forex and CFD, and is designed to help clients understand and assess the risks associated with investing in these financial instruments and responsible approach to make informed investment decisions.
Trading on the Forex market and other financial markets involves certain tradable and non-tradable risks.
Risk Classification can be done in different ways as listed below:
BY SOURCE OF ORIGIN:
- systemic risk — is the risk, associated with the operation of the system as a whole and is not associated with a particular financial instrument. The major systemic risks include political risk, the risk of adverse (from the point of view of the conditions of doing business), changes in legislation, macroeconomic risks (the sharp devaluation of the national currency, the crisis of the government debt market, the banking crisis, a currency crisis, etc.). Systemic risks include the risks of force majeure.
- non-system (individual) risk — is the risk of a particular financial market participant: the investor, forex company, trustee, or other trading system.
BY RISK FACTOR:
- economic risk — is the risk of adverse economic events. The likelihood of economic risk is generally higher than the system. The following types of economic risks:
- price risk — is the risk of loss from adverse price changes. A number of instruments have significant intraday time ranges of price changes that implies a high risk for trading operations both gains and losses;
- currency risk — is the risk of loss from adverse changes in exchange rates;
- Interest rate risk — is the risk of loss due to adverse changes in interest rates;
- inflation risk — is the risk of loss of purchasing power of money;
- Liquidity risk — is the possibility of difficulties arising from the sale or purchase of a financial instrument at a time, which can also lead to an increase in the size of the spread. The large spread makes it difficult to stop the use of limit orders, put up for limiting the extent of the losses at the opening (stop-loss) position. To avoid major losses to the Customer will have to monitor the situation on the financial market and to exercise reasonable activity in the management of their positions;
- legal risk — is the risk of legislative changes (legislative risk) — the possibility of losses with new or changing (cancellation) of the existing legislation, including tax. Legislative risk includes the possibility of losses from the lack of regulations governing the activities of the financial market, and in particular on the Forex market;
- socio-political risk — is the risk of a radical change in the political and economic situation, the risk of social unrest, including strikes, the risk of the outbreak of hostilities;
- crime risk — is the risk associated with the illegal actions of third parties, eg such as fraud, unauthorized access to computer systems and confidential information, etc.;
- operational (technical, technological, personnel) — is the risk of direct or indirect loss
- because of the failure of information, communication, electronic, electrical and other systems, or
- because of errors due to the imperfection of the market infrastructure, including technology operations, procedures, management, accounting and control, or
- because of the actions (or inaction) of the employees.
For example, when working with a client terminal may fail due to a problem with your hardware, software malfunction, incorrect settings, outdated version or poor communication on the client side. At the time of peak loads (for example, when the economic news) the client must be aware of overloading the communication channel and limit the possibility of contact by telephone with the FOREX-company.
- nature — risk, is the risk that is independent of human activity (the risks of natural disasters: earthquake, flood, hurricane, typhoon, lightning, etc.).
- technogenic — risk, is the risk generated by human activities: accidents, fires, etc.
ON ECONOMIC IMPLICATIONS FOR THE CLIENT:
- risk of loss of income — is the possibility of an event which involves the partial or complete loss of expected income from investments;
- — the risk of loss of invested funds — is the possibility of occurrence of an event that involves the partial or complete loss of funds invested;
CLIENT LIAISON WITH SOURCES OF RISK:
- immediate risk — is a source of risk is directly related to any relationship with the client;
- indirect risk — is the possibility of occurrence of adverse events to the Customer at the source, not connected directly with the client, but entailing a chain of events that ultimately lead to the loss of the Customer.
- Customer transactions in the commission of the following additional specific types of risks:
- Transactions in financial instruments of the Forex market and CFD are characterized by high degree of risk due to the leverage effect is relatively small exchange fluctuations may have a significant impact on the trading account.
- In the event that the financial market is a situation unfavorable for busy customers in this market position, it is likely in a relatively short period of time exposed to loss in the amount of the initial deposit and any additional funds deposited by the Client for the open positions, contracting and dealing on the basis the Agreement.
- In case of unfavorable price movements for the client, in the cases provided for by the Treaty and the Regulations of interaction between the Company and the Client, the Client position can be forcibly eliminated, which could lead to the implementation of the risk of loss of income and the risk of loss of invested funds. Customer will be responsible for any losses generated during this.
- Due to the conditions prevailing in the Forex market, it may become difficult or impossible to close a previously opened position on the Client of the requested price. The emergence of such a situation is possible, for example, the rapid change in prices.
- — Stop orders to limit losses not always limit losses to a level calculated in advance, as the rapid change in prices in the market price of the transaction may significantly differ from the stop price for the worse.
- The Company hereby notifies you that the Company enters into similar agreements with third parties, and also takes account of third parties under other agreements and carries out transactions and other transactions with financial instruments Forex and CFD in the interests of the third parties and its own interests.
- The Company hereby notifies the Client that the transactions and other transactions with financial instruments Forex and CFD in the interests of third parties and in their own interest of the Company may create a conflict between property and other interests of the Company and you.
- The client is also notified that the Company does not guarantee income and makes no representations as to the income from the operations conducted by it under the Agreement with the Client. The Customer shall accept the decision made by the financial market transactions in financial instruments, as well as determines the investment strategy.
- Operations in the Forex market and other financial markets may result in financial losses, past experience does not determine the financial results in the future. Any financial success of others does not guarantee the same results for the client.
- Given the above, the client should carefully consider whether the risks arising from operations with financial instruments Forex and CFD, acceptable to him, in view of its investment objectives and financial capabilities.
- All of the above is not intended to force the client to refrain from executing transactions, and is only intended to help customers understand the risks of this type of business, to determine their eligibility, assess your financial goals and opportunities and take a responsible approach to the issue of selecting an appropriate investment strategy.
All posted material is a marketing communication solely for informational purposes and reliance on this may lead to loss. Past performance is not a reliable indicator of future results. Please read our full disclaimer.