The risk of
loss in trading foreign exchange can be substantial. You should
carefully consider whether such trading is suitable for you in
light of your financial condition. You may sustain a total loss
of funds and any additional funds that you deposit with your
broker to maintain a position in the foreign exchange market.
Actual past performance is no guarantee of future results.
Simulated performance results also have certain limitations
unlike actual performance records; simulated results do not
represent composite trading. No representation can or is being
made that any trading system will, or is likely, to achieve
profits or losses similar to those shown in this simulated
Prospective investors must recognize that any simulation of a
hypothetical record, even when based on actual trading systems,
with qualified trade execution, has inherent limitations. We
believe that the records as presented should be of interest to
investors in determining whether to participate, such rates of
return should by no means be taken as an indication of how the
system will perform or would have performed, even given the same
trades. Any performance record compiled from individual
performance records of any trading methodologies has certain
hypothetical and artificial characteristics and must be
If you purchase or sell a foreign exchange option you may
sustain a total loss of the initial margin funds and additional
funds that you deposit with your broker to establish or maintain
your position. If the market moves against your position, you
could be called upon by your broker to deposit additional margin
funds, on short notice, in order to maintain your position. If
you do not provide the additional required funds within the
prescribed time, your position may be liquidated at a loss, and
you would be liable for any resulting deficit in you account.
Under certain market conditions, you may find it difficult or
impossible to liquidate a position. This can occur, for example
when a currency is deregulated or fixed trading bands are
The placement of contingent orders by you or your trading
advisor, such as a "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.
A "spread" position may not be less risky than a simple "long"
or "short" position.
The high degree of leverage that is often obtainable in foreign
exchange trading can work against you as well as for you. The
use of leverage can lead to large losses as well as gains.
In some cases, managed accounts are subject to substantial
charges for management and advisory fees. It may be necessary
for those accounts that are subject to these charges to make
substantial trading profits to avoid depletion or exhaustion of
Currency trading is speculative and volatile Currency prices are
highly volatile. Price movements for currencies are influenced
by, among other things: changing supply-demand relationships;
trade, fiscal, monetary, exchange control programs and policies
of governments; United States and foreign political and economic
events and policies; changes in national and international
interest rates and inflation; currency devaluation; and
sentiment of the market place. None of these factors can be
controlled by any individual advisor and no assurance can be
given that an advisor's advice will result in profitable trades
for a participating customer or that a customer will not incur
losses from such events.
Currency trading can be highly leveraged. The low margin
deposits normally required in currency trading (typically
between 3%-20% of the value of the contract purchased or sold)
permit an extremely high degree leverage. Accordingly, a
relatively small price movement in a contract may result in
immediate and substantial losses to the investor. Like other
leveraged investments, in certain markets, any trade may result
in losses in excess of the amount invested.
Currency trading presents unique risks. The interbank market
consists of a direct dealing market, in which a participant
trades directly with a participating bank or dealer, and a
brokers' market. The brokers' market differs from the direct
dealing market in that the banks or financial institutions serve
as intermediaries rather than principals to the transaction. In
the brokers' market, brokers may add a commission to the prices
they communicate to their customers, or they may incorporate a
fee into the quotation of price.
Trading in the interbank markets differs from trading in futures
or futures options in a number of ways that may create
additional risks. For example, there are no limitations on daily
price moves in most currency markets. In addition, the
principals who deal in interbank markets are not required to
continue to make markets. There have been periods during which
certain participants in interbank markets have refused to quote
prices for interbank trades or have quoted prices with unusually
wide spreads between the price at which transactions occur.
Frequency of trading; degree of leverage used. It is impossible
to predict the precise frequency with which positions will be
entered and liquidated. Foreign exchange trading , due to the
finite duration of contracts, the high degree of leverage that
is attainable in trading those contracts, and the volatility of
foreign exchange prices and markets, among other things,
typically involves a much higher frequency of trading and
turnover of positions than may be found in other types of
Trading is very speculative and risky. Foreign Exchange Trading
is highly speculative and is suitable only for those customers
who (a) understand and are willing to assume the economic, legal
and other risks involved, and (b) are financially able to assume
losses significantly in excess of margin or deposits. Customer
represents, warrants and agrees that Customer understands these
risks; that Customer is willing and able, financially and
otherwise, to assume the risks of Foreign Exchange Trading and
that loss of Customerís entire Account Balance will not change
Customerís life style.
This brief statement cannot disclose all the risks and other
significant aspects of the foreign exchange markets. You should
therefore carefully study all documents and foreign exchange
trading before you trade, including the description of the
principle risk factors of the investment.