Forex Risk Disclosure
The risk of loss in trading off-exchange currencies can be substantial. Before deciding to participate in the Forex trading, you should carefully consider your investment objectives, experience, knowledge and risk tolerance to be sure that trading in Forex is appropriate for you. There are substantial risks in Forex trading; therefore you should not invest money that you cannot afford to lose. Some of the risks that you should be aware of:
- You may sustain a total loss of the initial margin funds and any additional funds that you deposit with your broker to establish or maintain a position in the Forex trading. If the market moves against your position, you may be called upon by your broker to deposit a substantial amount of additional margin funds, on short notice in order to maintain your position. If you do not provide the required funds within the prescribed time, your position may be liquidated at a loss, and you will be liable for any resulting deficit in your account.
- Under certain market conditions, you may find it difficult or impossible to liquidate a position.
- Placing contingent orders, such as stop-loss or stop-limit orders will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders.
- The high degree of leverage that is often obtainable in Forex trading because of the small margin requirements can work against you, as well as for you. The use of leverage can lead to large losses as well as gains.
- You should be aware of additional risks associated with off-exchange foreign currency trading including creditworthiness and limited regulatory protection.
- The Foreign Currency trading you are entering into is not conducted on an exchange. The futures commission merchant or retail foreign exchange dealer is acting as counterparty in these transactions and, therefore, acts as the buyer when you sell and the seller when you buy. As a result, the futures commission merchant or retail foreign exchange dealer interests may be in conflict with yours. Unless otherwise specified in your written agreement or other written documents the futures commission merchant or retail foreign exchange dealer offers might not be the best prices available and the futures commission merchant or retail foreign exchange dealer may offer different prices to different customers.
- If the futures commission merchant or retail foreign exchange dealer elects not to cover its own trading exposure, then you should be aware that the futures commission merchant or retail foreign exchange dealer may make more money if the market goes against you. Additionally, since the futures commission merchant or retail foreign exchange dealer acts as the buyer or seller in the transaction, you should carefully evaluate any trade recommendations you receive from the futures commission merchant, retail foreign exchange dealer or any of its solicitors.
This brief statement cannot disclose all the risks and other significant aspects of the commodity markets. You should, therefore, carefully study this disclosure page before you trade.
Additionally, you should be aware that Transcend Capital (“Transcend”) is compensated for referring your account to the futures commission merchant or retail foreign exchange dealer that accepts your account. As part of Transcend’s referral agreement with the futures commission merchants or retail foreign exchange dealers, Transcend may be provided transaction history and data for your account.