Trading can result in substantial losses, including the loss of all money committed to a position. With some leveraged products or uncovered positions, losses can exceed your initial deposit. Educational content does not make trading safe or ensure that a product is suitable for you.

This disclosure accompanies the educational services of Shadow Patterns, operated by:

Cognirium Limited
Registration number: 78558578
Email: support@shadowpatterns.com
UNIT 85, UB FLOOR, ETON TOWER, 8 HYSAN AVENUE, CAUSEWAY BAY, HONG KONG

1. Market and price risk

Prices can move sharply because of economic releases, interest-rate decisions, political developments, company events or unexpected shocks. A market can open at a price far from its previous close. Diversification can reduce some exposures but cannot eliminate losses.

2. Leverage and margin

Leverage magnifies the effect of a price movement on your funds. A small adverse move can lead to a margin call or forced liquidation. A provider may close positions without waiting for you to add funds. Depending on the product, contract and applicable protections, you may owe more than you deposited. Do not assume negative-balance protection applies.

3. Liquidity, execution and stop orders

You may be unable to enter or exit a position when you want or at the displayed price. Spreads may widen, orders may be partially filled or rejected, and trading can be suspended. An ordinary stop-loss order does not guarantee an execution price; a stop-limit order may not execute at all.

4. Instruments discussed in our education

• Stocks: company-specific events, dilution, insolvency and market-wide declines can reduce or eliminate the value of an investment. Dividends are not guaranteed.
• Indices and “US30”: an index is a benchmark, not a directly held asset. Products marketed with an index-related name may be CFDs, futures, funds or other instruments, with different pricing, fees and contractual risks. Check the precise product.
• Foreign exchange: currency prices respond to economic and political changes. Leveraged or over-the-counter arrangements add margin, pricing and counterparty risks.
• Gold: physical gold, funds, futures and CFDs provide different exposures and involve different storage, issuer, financing, leverage or counterparty risks.
• Options: an option buyer can lose the entire premium and costs. Certain option-writing strategies can create very large or potentially unlimited losses. Expiry, time decay, volatility and exercise or assignment can materially affect an outcome.
• Short selling: losses may exceed the original proceeds and can be theoretically unlimited. Borrowing costs, a recall of borrowed securities or a forced buy-in can add to the risk.

5. Costs and currency effects

Commissions, spreads, overnight financing, exchange fees and currency conversion can materially reduce returns or increase losses. A strategy that appears profitable before costs may lose money after them. A return in one currency may translate into a loss in another.

6. Provider and technology risk

A broker, issuer, exchange or service provider may experience an outage, cyber incident, financial distress or operational failure. Investor-protection arrangements differ by jurisdiction and product; they do not generally protect you from ordinary market losses.

Internet interruptions, stale data, software errors and order-entry mistakes can prevent timely action. Protect your account credentials and understand your provider’s procedures for reporting problems.

7. Strategy, simulation and behavioural risk

Patterns and indicators are interpretations of data, not reliable forecasts. Correlations can change and strategies can suffer prolonged losing periods. Backtesting can be distorted by hindsight, selection of favourable examples and unrealistic execution assumptions.

Demo results do not reproduce every condition of a funded account. Fear, overconfidence, fatigue and attempts to recover losses can cause decisions that differ from a written plan. Buying education or mentorship does not remove these risks.

8. Before committing money

Understand the instrument, the maximum potential liability, costs and the provider’s contractual terms. Consider your financial commitments and capacity to absorb a loss, and obtain independent professional advice where appropriate. Do not treat funds needed for essential living expenses or debt repayment as risk capital.

This disclosure is not exhaustive and does not replace product-specific risk documents. It does not constitute a waiver of statutory rights or make any otherwise unsuitable product suitable for you.