Risk Disclosure Statement

1. General Risk Warning

This Risk Disclosure Statement is designed to help you understand the risks involved in trading Forex, CFDs, and other leveraged products offered by MarketsNova. It is crucial that you read and understand this document before you begin trading.

While trading can offer potential profit opportunities, it also exposes you to substantial risks. The high degree of leverage available in Forex and CFD trading can work both for and against you. Leverage can magnify your profits but can equally magnify your losses, potentially resulting in losses that exceed your initial deposit.

You should not engage in trading unless you understand the nature of the transactions you are entering into and the extent of your exposure to loss.

2. Leverage and Margin Trading Risks

2.1 Understanding Leverage

Leverage allows you to control a large position with a relatively small amount of capital. For example, with 100:1 leverage, you can control a $100,000 position with just $1,000 of margin.

2.2 Risks of Leverage

• Amplified Losses: While leverage can increase profits, it equally amplifies losses. A small adverse market movement can result in losses equal to or exceeding your entire investment.
• Margin Calls: If the market moves against your position, you may be required to deposit additional funds to maintain your position. If you fail to meet a margin call, your positions may be liquidated at a loss.
• Automatic Liquidation: Your positions may be automatically closed if your account equity falls below the required margin level, potentially at unfavorable prices.
• Losses Beyond Deposit: In extreme market conditions or when trading without negative balance protection, losses can exceed your initial deposit, leaving you owing money to us.

2.3 Margin Requirements

Margin requirements can change without notice based on market conditions, volatility, or regulatory requirements. We reserve the right to adjust leverage levels and margin requirements at any time.

3. Forex Market Risks

3.1 Market Volatility

The foreign exchange market can be extremely volatile, with currency prices subject to rapid and substantial movements. Major economic announcements, geopolitical events, or changes in interest rates can cause dramatic price swings within seconds.

3.2 24-Hour Market

The Forex market operates 24 hours a day during weekdays. Price movements can occur at any time, including when you are not actively monitoring your positions. Weekend gaps can result in positions opening at significantly different prices than they closed.

3.3 Liquidity Risk

While major currency pairs generally have high liquidity, certain market conditions or trading exotic currency pairs can result in:

• Difficulty in executing orders at desired prices
• Wider spreads
• Slippage between the requested and executed price
• Inability to close positions when desired

4. CFD-Specific Risks

4.1 Derivative Nature

CFDs are derivative instruments that derive their value from underlying assets. You do not own the underlying asset when trading CFDs, which means you do not have voting rights, dividends (unless specifically credited), or other ownership benefits.

4.2 Counterparty Risk

When you trade CFDs with MarketsNova, we act as the counterparty to your trades. This exposes you to counterparty risk - the risk that we may be unable to fulfill our obligations to you.

4.3 Expiration and Rollover

Some CFDs have expiration dates and may need to be rolled over to maintain exposure. Rollover may involve costs and can result in price differences due to different contract specifications.

4.4 Overnight Financing

Positions held overnight are subject to swap charges (positive or negative) based on the interest rate differential between the two currencies or underlying assets. These charges can significantly impact profitability, especially for long-term positions.

5. Technology and Platform Risks

5.1 Technical Failures

Trading relies on electronic systems which are subject to potential failures, including:

• Internet connection disruptions
• Power outages
• Hardware or software malfunctions
• Platform downtime or maintenance
• Cyber attacks or security breaches

Any of these can prevent you from placing orders, modifying positions, or closing trades, potentially resulting in losses.

5.2 Execution Risks

• Slippage: The difference between expected price and execution price, particularly during high volatility
• Requotes: Your order may be requoted at a different price if the market moves before execution
• Order Rejection: Orders may be rejected due to insufficient margin, invalid parameters, or system constraints
• Latency: Delays in order transmission and execution can impact your trading results

5.3 Price Feed Issues

Price feeds are provided by third parties and may occasionally be incorrect, delayed, or interrupted. We are not liable for errors in price feeds or resulting losses.

6. Market Conditions and Events

6.1 Gapping

Markets can "gap" - prices can jump from one level to another without trading at intermediate levels. This commonly occurs:

• At market open after weekends or holidays
• Following major news announcements
• During periods of extreme volatility

Gaps can cause stop-loss orders to be executed at prices significantly worse than your stop level, resulting in greater losses than anticipated.

6.2 Force Majeure Events

Extraordinary events beyond our control may impact trading, including:

• Natural disasters
• Wars or acts of terrorism
• Government actions or policy changes
• Market closures or suspensions
• Currency controls or restrictions

6.3 Abnormal Market Conditions

During periods of market stress, illiquidity, or extreme volatility, we may:

• Widen spreads
• Reduce available leverage
• Suspend trading in certain instruments
• Reject or delay orders
• Close positions to reduce risk exposure

7. Regulatory and Legal Risks

7.1 Regulatory Changes

Financial markets are subject to regulatory oversight. Changes in regulations can:

• Affect leverage limits
• Impact product availability
• Alter margin requirements
• Change tax treatment
• Require additional disclosure or reporting

7.2 Jurisdictional Issues

Different countries have different regulations regarding Forex and CFD trading. It is your responsibility to ensure that trading with MarketsNova is legal in your jurisdiction.

7.3 Tax Implications

Trading profits may be subject to taxation in your jurisdiction. You are responsible for understanding and complying with applicable tax laws. We recommend consulting with a tax professional.

8. Specific Risk Factors

8.1 Economic and Political Risks

• Central bank policy decisions and interest rate changes
• Political instability or government changes
• Economic data releases and revisions
• Trade policies and international relations
• Inflation, recession, or economic crises

8.2 Psychological Factors

Trading can be emotionally challenging. Common psychological pitfalls include:

• Overtrading or revenge trading after losses
• Fear and greed affecting decision-making
• Failure to follow risk management rules
• Over-confidence leading to excessive risk-taking
• Stress and its impact on judgment

8.3 Complexity Risk

Forex and CFD trading is complex and may not be suitable for all investors. Lack of understanding of:

• How leverage works
• Margin requirements and calculations
• Order types and their implications
• Market mechanics and price movements

...can result in unexpected losses.

9. Risk Management

While we provide tools to help manage risk, the ultimate responsibility for risk management lies with you. We strongly recommend:

• Use Stop-Loss Orders: To limit potential losses (but be aware they do not guarantee protection against slippage or gaps)
• Never Risk More Than You Can Afford to Lose: Only use risk capital that you can afford to lose entirely
• Diversify: Don't concentrate all your capital in one position or instrument
• Use Appropriate Leverage: Lower leverage reduces risk exposure
• Maintain Adequate Margin: Keep sufficient funds in your account to withstand adverse market movements
• Monitor Positions: Regularly review and monitor all open positions
• Educate Yourself: Continuously improve your trading knowledge and skills
• Start Small: Begin with small positions until you gain experience
• Have a Trading Plan: Develop and follow a disciplined trading strategy

10. No Guarantees of Profit

Past performance is not indicative of future results. No trading system, strategy, or educational material guarantees profits or the elimination of risk. Any testimonials, examples, or case studies are not representative of typical results.

Many traders lose money. According to industry statistics, a significant majority of retail traders lose their entire investment when trading leveraged products. You should be prepared for the possibility of losing your entire investment.

11. Suitability Assessment

Before trading, you should honestly assess whether trading is appropriate for you based on:

• Your financial situation and ability to bear losses
• Your investment objectives and risk tolerance
• Your knowledge and experience in financial markets
• Your understanding of leverage and margin trading
• Your ability to monitor positions actively

If you do not understand these risks or are uncertain whether trading is suitable for you, you should seek independent professional advice before trading.

12. Acknowledgment and Acceptance

By opening an account and trading with MarketsNova, you acknowledge that:

• You have read, understood, and accepted this Risk Disclosure Statement
• You understand that you can lose your entire investment
• You have the financial capacity to bear such losses
• You are trading at your own risk and responsibility
• We have not provided you with any investment advice or recommendations
• You have sought independent advice if needed
• You accept all risks associated with trading

Contact Information

If you have questions about the risks involved in trading or need clarification on any point in this disclosure, please contact us:

Email: risk@marketsnova.com
Address: MarketsNova Risk Management
123 Financial District, Suite 500
London, EC2V 7WS, United Kingdom