Risk Categories
Before You Trade
Essential Considerations
- • Assess your risk tolerance
- • Understand the products
- • Use risk management tools
- • Start with a demo account
This Risk Disclosure Statement outlines the significant risks associated with trading financial instruments. Trading on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could sustain a loss of some or all of your initial investment. Therefore, you should not invest money that you cannot afford to lose.
Market Risk
Price volatility and market movements
Price Fluctuations
Financial markets are volatile. Prices can move rapidly in either direction due to economic data, political events, or market sentiment. These movements may result in significant losses.
Gap Risk
Prices can "gap" over weekends or during market closures, opening at significantly different levels from where they closed. This can trigger stop-loss orders at unfavorable prices.
Past performance is not indicative of future results. Historical data and back-testing do not guarantee future profitability.
Leverage Risk
Amplified gains and losses
Amplified Losses
While leverage can amplify profits, it also amplifies losses. A small market movement against your position can result in significant losses, potentially exceeding your initial deposit.
| Leverage | Effect on $1,000 | 1% Move For | 1% Move Against |
|---|---|---|---|
| 1:10 | Controls $10,000 | +$100 | -$100 |
| 1:50 | Controls $50,000 | +$500 | -$500 |
| 1:100 | Controls $100,000 | +$1,000 | -$1,000 |
| 1:200 | Controls $200,000 | +$2,000 | -$2,000 |
Margin Calls: If your account equity falls below required margin levels, you may receive a margin call and be required to deposit additional funds immediately. Failure to meet margin calls may result in automatic position liquidation.
Liquidity Risk
Ability to enter/exit positions
During periods of low liquidity or high volatility, you may be unable to execute trades at desired prices. This can result in:
-
1Slippage - orders filled at worse prices than expected
-
2Widened spreads - increased trading costs
-
3Rejected orders - inability to open or close positions
-
4Extended hold times - delays in order execution
Systemic Risk
Market-wide events and disruptions
Black Swan Events
Unpredictable, rare events that have severe consequences across financial markets (e.g., financial crises, geopolitical conflicts, pandemics).
Contagion Risk
Problems in one market or institution spreading to others, potentially affecting unrelated positions in your portfolio.
Operational Risk
Technical and platform risks
- System failures: Platform outages, connectivity issues, or software bugs
- Execution delays: Slow order processing during high volatility
- Data inaccuracies: Incorrect price feeds or delayed information
- Third-party risks: Issues with liquidity providers or payment processors
Your Acknowledgment
Required confirmation of understanding
By opening a trading account with Global Equinox Trade, you acknowledge and confirm that:
Final Warning: If you do not fully understand these risks or cannot afford potential losses, DO NOT TRADE. Consider starting with a demo account to gain experience without financial risk.
If you have questions about these risks or need clarification on any aspect of trading, contact our support team before depositing funds or placing trades.