What you need to know about
commodity trading, and trading commodities for a living. The truth about options
and
futures trading, day trading, paper trading, commodity trading gurus and
courses. Scams and BS, risks and rewards
associated with trading commodities.
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You need to know this! |
Risk Disclosures |
More... |
Commodity trading is fundamentally risky. Uh-huh. You will lose money trading commodities as a career or hobby, it goes with the territory. How much you lose, however, is up to you. Commonly quoted statistics seem to indicate that only about 10% of all traders survive the learning curve to become profitable, which would appear to indicate that the other 90% are doing something wrong. Hmmmm. Whatever their error might be, sufficient people have lost heavily enough that the CFTC requires all vendors or purveyors of commodity futures and options trading information to prominently display a huge disclaimer and risk disclosure, which reads as follows in the adjoining columns. Please read them and carefully consider the thoughts contained therein. Education: the path from
cocky ignorance to miserable uncertainty. |
About paper trading or trade recommendations:
THE PLACEMENT OF CONTINGENT ORDERS, SUCH
AS A “STOP-LOSS” OR“STOP-LIMIT” ORDER, WILL NOT NECESSARILY LIMIT YOUR
LOSSES TO THE INTENDED AMOUNTS, SINCE MARKET CONDITIONS MAY MAKE IT
IMPOSSIBLE TO EXECUTE SUCH ORDERS. ALSO, UNDER CERTAIN MARKET CONDITIONS –
SUCH AS “LIMIT MOVES”- IT MAY BE DIFFICULT OR IMPOSSIBLE TO LIQUIDATE A
POSITION. THE FOLLOWING HYPOTHETICAL RESULTS DO NOT ACCOUNT FOR COMMISSIONS
AND FEES, WHICH WILL NEGATIVELY AFFECT RESULTS. NO REPRESENTATION IS BEING
MADE THAT ANY ACCOUNT HAS IN THE PAST, OR WILL About paper trading: DISCLOSURE OF RISK: THE RISK OF LOSS IN
TRADING FUTURES AND OPTIONS CAN BE SUBSTANTIAL; THEREFORE, ONLY GENUINE
RISK FUNDS SHOULD BE USED. FUTURES AND OPTIONS ARE NOT SUITABLE INVESTMENTS
FOR ALL INDIVIDUALS, AND INDIVIDUALS SHOULD CAREFULLY CONSIDER THEIR
FINANCIAL CONDITION IN DECIDING WHETHER TO TRADE. OPTION TRADERS SHOULD BE
AWARE THAT THE EXERCISE OF A LONG OPTION WOULD RESULT IN A FUTURES
POSITION. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS,
SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY
ACCOUNT WILL, OR IS LIKELY TO, ACHIEVE PROFITS OR LOSSES SIMILAR TO |
IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES
BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS
SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE
LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY
PREPARED WITH THE BENEFIT OF HIND SIGHT. IN ADDITION, HYPOTHETICAL TRADING
DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN
COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR
EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR
TRADING PROGRAM, IN SPITE OF TRADING LOSSES, ARE MATERIAL POINTS WHICH CAN
ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER
FACTORS RELATED TO THE MARKETS, IN GENERAL, OR TO THE IMPLEMENTATION OF ANY
SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE
PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN
ADVERSELY AFFECT ACTUAL TRADING RESULTS. MORE TO FOLLOW... If you intend trading commodities with real money at some point in the future, only use funds that you can easily afford to lose. -Shaggy |
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