Previous results are not a guarantee of investment income in the future.
Despite the fact that trading in the financial markets (including margin trading which implies the use of tools) makes it possible to obtain high profits, it is associated with a potentially high risk of loss. For this reason, before you start trading, you need to thoroughly work out your investment strategy given the available resources at your disposal.
This notice does not describe all the risks associated with the conduct of investment activities with the use of financial instruments within the margin loan. If you have further questions, you can call toll-free for the assistance of TeleTrade consultants.
- The purpose of this notice is to provide a broad mass of stakeholders general information about the potential risks associated with the conclusion of transactions in the financial markets, as well as information about the risks involved in working with financial instruments Forex and CFD.
- The peculiarity of investment in financial instruments of the Forex market and CFD is a higher degree of risk, due to the fact that it involves conducting transactions with the use of "leverage." As a consequence, in addition to the possibility of loss of potential income from invested funds activities could lead to the loss of the invested funds themselves. As part of this, Notice of risk regarding transactions with financial instruments Forex and CDF, should be understood as the probability of the occurrence of an event that could lead to a shortfall in income by the Customer, and the loss of investment assets.
- This Notice is intended to help the client to objectively evaluate and understand the risks associated with the process of investing in financial instruments, and is not intended to force the customer to refuse to work with financial instruments Forex and CFD.
- Doing Business in the financial markets (including Forex) involves various risks, both trade and non-trade associated.
BY SOURCE OF:
Systemic risk . The risk associated with the functioning of the financial system and is not defined by any particular financial instrument. The major systemic risks are political risks, risks related to adverse (from the standpoint of the actual conditions of business), changes in legislation, macroeconomic risks (devaluation crisis of government debt market, the banking crisis, a currency crisis, etc.).
In addition to the above, the systemic risk is also the risk associated with the occurrence of “force majeure”; an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, or an event described by the legal term act of God (such ashurricane, flooding, earthquake, volcanic eruption, etc.).
Unsystematic risk (individual) character. This is the risk of each individual participant financial market; forex company, investor, asset manager of the trading system and others.
For different risk factors:
The risk of an economic nature. This is the risk associated with the occurrence of adverse economic events. Typically, the probability of economic risk is higher than the system.
The two distinct types of economic risks:
Price risk. This is the risk associated with losses from adverse price changes. Due to the fact that many financial tools have significant intraday time ranges of price changes, trading with high probability can carry both profits and losses.
Currency risk; This is the risk of loss associated with adverse changes in exchange rates.
Interest rate risk; This is the risk of losses associated with negative changes in interest rates.
Inflation risk; The risk of a possible decline in the purchasing power of money.
Liquidity risk; This is the probability of possible difficulties with the purchase or sale of a particular financial instrument at a time, which can lead to an increase in the spread. The large size makes it difficult to spread the use of limit stop orders, which are set to limit the extent of losses during the opening position (stop-loss). To avoid serious losses the Client will continuously monitor the situation on the financial markets and have reasonable activity in the management of their positions.
The risk of a legal nature. This is the risk of possible legislative changes associated with possible losses arising from the creation of new or cancellation (change) of the old laws. This group includes the risk of changes in tax legislation. Legal risk also includes losses due to lack of legal framework that regulates the activities of participants in the financial markets, including the Forex market.
Socio-political. Risk refers to the possibility of radical changes in the political and economic spheres. Includes the risk of potential social instability (eg, strikes), the risk of the outbreak of hostilities, etc.
Criminal risk is associated with the implementation of the illegal actions of third parties. Examples of such risk can act: fraud, hacking computer systems and confidential customer information, etc.
Figure operational (technical, technological, human) character. The risk associated with direct or indirect losses due to:
- incorrect operation of electronic, communication, power, information, and other systems;
- errors, the cause of which is the imperfection of the market infrastructure. For example, procedures, management, technology operations;
- incorrect actions (or inaction) of the personnel.
So, while working with the client terminal, it may produce negative results due to malfunctions in the process of hardware, installed software failures, incorrect settings, poor quality of the client or outdated software. The client must be aware of the risk of overloading the communication channel during the peak period (for example, at the time of the release of economic news) that hamper the ability to communicate with his forex company.
- Nature; Risk that is not dependent on human activities (flood, earthquake, typhoon, hurricane, etc.).
- The risk of man-made risks caused by human activities: fires, accidents, etc.
Economic impact on the factors to Client:
The risk of a loss of income. The probability of a situation which leads to partial or complete loss of prospective income from the investment;
The risk of possible loss of funds invested. The probability of a situation which leads to partial or complete loss of funds invested.
Client connection with the source of risk:
Immediate risk. Risk, which is directly related to a defined relationship with the client;
Indirect risk. Probability of occurrence of a specific event because of the source, not connected with the Client, however, indirectly leading to the emergence of losses to the Client.
At the time of the Customer's financial transactions may be additional types of risks that are more specifics:
Operations associated with the financial instruments of the Forex market and CFD, have an increased risk, due to the fact that the effect of leverage can have a significant impact on the client's account for a relatively small exchange fluctuations;
In the event of the financial market situation being unfavorable to the position occupied by the client in this market, it is likely to incur losses equal to the initial deposit and additional funds previously deposited by customers to support the open positions of transaction on the basis of the Agreement and the conclusion of the contract in a relatively short period of time;
In the event of adverse price movements for the client and in the situations provided for by the Treaty and the Regulations of the interaction between the Company and the Customer, Customer's position may be liquidated by force, which in turn can lead to the implementation of the risk associated with the loss of income and invested capital. In this case, the customer is fully responsible for any resulting losses while;
Under certain conditions unfolding in the Forex market, closing the previously opened position at the desired price is difficult or impossible. This situation may also arise in the case of rapid changes in prices;
Stop orders aimed at limiting possible losses are not always able to limit the loss to a pre-calculated level, due to the fact that in a time of rapid changes in market prices, the value of the transaction may be fundamentally different for the worse from the stop price.
This Notice, the Company informs you that the Company will enter into similar agreements with third parties, and also takes account of third parties under other agreements and carries out transactions or other financial transactions on the Forex and CFD markets on behalf of others and for their own benefit.
The Company hereby notifies the Client that the transactions and other transactions related to financial instruments Forex and CFD for the benefit of third parties, as well as in their own interest of the Company, may cause a conflict between property and other interests of the Company and you.
The client is also notified that the Company can not guarantee the receiving of income, and makes no warranties or guarentees with respect to income from operations, which are conducted under the Contract with the Client. The Client should make independent decisions on financial market transactions involving financial instruments, including defining their own investment strategy.
Operating in the Forex market and other financial market operations can lead to financial losses; past experience can not determine the financial results in the future. The financial success of others is not a guarantee of obtaining similar results to the Client.
Based on the statements of risk in Notice, the Customer must carefully examine and question the level of the acceptability of risks associated with conducting operations related to money market instruments Forex and CFD, taking into account their financial capacity and investment goals.
This Notice was created to help the client objectively evaluate and understand the risks associated with the process of investing in financial instruments, and is not intended to force or discourage the customer from working with financial instruments Forex and CFD.