Risk Disclosure Statement
Last updated: 1 January 2025 · EdgeSync Markets Ltd
Important Risk Warning
CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with EdgeSync Markets. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
This Risk Disclosure Statement ("Statement") is provided by EdgeSync Markets Ltd ("EdgeSync Markets", "we", "us", or "our"), incorporated in Seychelles and regulated by the Financial Services Authority of Seychelles (FSA). This Statement is provided to assist you in understanding the nature and risks associated with trading foreign exchange (forex), contracts for difference (CFDs), and other financial instruments offered through our platform.
This Statement does not purport to disclose all of the risks associated with forex and CFD trading. You should not trade in these products unless you fully understand the nature of the contracts and the extent of your exposure to risk. You should also be satisfied that these products are suitable for you in light of your financial circumstances, investment objectives, and risk tolerance.
If you are in any doubt, you should seek independent financial advice before proceeding.
1. Leverage and Margin Risk
Trading on margin means you can control a large position with a relatively small amount of capital. EdgeSync Markets offers leverage of up to 1:500, meaning a movement of as little as 0.2% in the underlying market can result in the complete loss of your deposited margin.
Key risks associated with leverage include:
- Profits and losses are amplified proportionally to the leverage applied. A 1% adverse move on a 1:100 leveraged position results in a 100% loss of the deposited margin.
- Margin calls may require you to deposit additional funds at short notice. Failure to do so may result in the automatic closure of your positions at a loss.
- Negative balance protection is provided in accordance with regulatory requirements; however, you should not rely on this as a primary risk management tool.
- Higher leverage increases both potential reward and potential loss. Clients are strongly advised to use conservative leverage levels.
2. Market Risk
The value of financial instruments can fluctuate significantly and without warning due to various factors beyond your or our control, including but not limited to:
- Economic events: Interest rate decisions, employment data, GDP releases, inflation figures, and central bank announcements can cause sharp and sudden price movements.
- Political events: Elections, geopolitical tensions, sanctions, trade disputes, and political instability can cause significant volatility in currency and commodity markets.
- Market sentiment: Speculative activity, changes in investor sentiment, and rumours can drive price movements that are disconnected from fundamental value.
- Correlation risk: Assets that historically moved independently may become correlated during periods of market stress, limiting the effectiveness of diversification.
Past performance of any instrument, strategy, or signal provider is not indicative of future results. Markets can move against your position at any time, and you may lose all of your invested capital.
3. Liquidity Risk
Liquidity refers to the ease with which a financial instrument can be bought or sold without causing a significant price movement. Liquidity risks include:
- During periods of high volatility or low market activity (such as market opens, major news events, or public holidays), spreads may widen significantly and the ability to execute orders at desired prices may be impaired.
- Stop-loss orders are not guaranteed and may be executed at a price worse than specified (known as "slippage"), particularly in fast-moving or illiquid markets.
- Exotic currency pairs, minor indices, and some commodity instruments may have lower liquidity than major instruments, resulting in wider spreads and greater price impact on execution.
- In extreme market conditions, it may not be possible to execute orders at all, or orders may be partially filled.
4. Counterparty Risk
When trading CFDs, you are entering into a contract with EdgeSync Markets as the counterparty to your trade. While we maintain segregated client funds in accordance with regulatory requirements, you are exposed to the financial health of EdgeSync Markets. In the event of our insolvency, recovery of funds may be limited.
We mitigate counterparty risk by:
- Holding client funds in segregated accounts with reputable banking institutions
- Maintaining adequate regulatory capital in accordance with FSA requirements
- Hedging a proportion of client positions with institutional liquidity providers
5. Copy Trading Risk
EdgeSync Markets offers a copy trading service that allows you to automatically replicate the trades of selected signal providers ("Master Traders"). Specific risks associated with copy trading include:
- The past performance of a Master Trader is not indicative of future results. A trader with an excellent historical record may experience significant losses in the future.
- You do not have direct control over individual trades. Copying another trader's strategy means accepting all of their trading decisions, including potentially high-risk positions.
- There may be a time delay between a Master Trader's order and the replication of that order in your account, resulting in different execution prices and outcomes.
- Differences in account size between you and the Master Trader may result in proportional differences in risk and return.
- You remain fully responsible for managing your own account and monitoring copied trades. You should set appropriate stop-loss limits and maximum drawdown parameters.
- Master Traders are not licensed financial advisers and their trading activity does not constitute personalised investment advice.
6. Technology and Operational Risk
Electronic trading systems are subject to technological failures, including but not limited to:
- Connectivity failures: Internet outages or disruptions to communication networks may prevent you from placing, modifying, or closing orders.
- Platform downtime: Scheduled or unscheduled maintenance may result in temporary unavailability of the trading platform.
- System errors: Software bugs, hardware failures, or cyberattacks may disrupt trading operations or result in erroneous order execution.
- Data errors: Incorrect price feeds or data disruptions may temporarily present incorrect market information.
EdgeSync Markets implements redundant systems and business continuity measures to minimise operational disruptions; however, we cannot guarantee uninterrupted service. You should always have alternative means of contacting us to manage open positions.
7. Currency Risk
If your account base currency differs from the currency of a financial instrument you are trading or the currency in which your profit or loss is denominated, you will be exposed to currency risk. Exchange rate fluctuations may increase or decrease the value of your profits or losses when converted to your base currency. This risk is in addition to any market risk associated with the underlying instrument.
8. Cryptocurrency Risk
Cryptocurrency CFDs are particularly high-risk instruments due to the inherent volatility of digital assets. Additional risks include:
- Extreme price volatility — cryptocurrencies can lose 50% or more of their value in a matter of days
- Regulatory uncertainty in many jurisdictions which may affect the value or legality of crypto assets
- No central bank backing or government guarantee of value
- Liquidity may be significantly lower than for traditional forex instruments
- Gaps in weekend and overnight price action may result in significant slippage
9. Suitability
Trading in leveraged financial instruments is not suitable for all investors. You should carefully consider your financial situation, investment objectives, experience, and risk tolerance before trading. You should only invest money that you can afford to lose entirely without affecting your standard of living or financial security.
We conduct a suitability and appropriateness assessment during the account opening process. If you do not meet the suitability criteria, we may advise you of the risks and, in some cases, decline to open an account.
10. Risk Management Recommendations
While we cannot eliminate risk, we recommend the following practices to manage your exposure:
- Never risk more than you can afford to lose
- Use stop-loss orders on all open positions to limit potential losses
- Avoid using maximum available leverage — lower leverage reduces both risk and reward
- Diversify your portfolio and do not concentrate risk in a single asset or position
- Monitor your positions and account balance regularly
- Stay informed about economic events and news that may affect your positions
- When using copy trading, set maximum drawdown limits and review Master Trader performance regularly
- Seek independent financial advice if you are uncertain about any aspect of your trading activity
11. Regulatory Information
EdgeSync Markets Ltd is incorporated in Seychelles (Company No. 8432917) and is authorized and regulated by the Financial Services Authority of Seychelles (FSA) under licence number SD-0291. Our regulatory status imposes obligations on us with respect to the fair treatment of clients, maintenance of adequate capital, and segregation of client funds.
This disclosure is provided for general information purposes and does not constitute investment advice, a solicitation, or an offer to buy or sell any financial instrument. The availability of certain products and services may be restricted in certain jurisdictions.
Acknowledgement: By opening an account with EdgeSync Markets and/or by continuing to use our services, you acknowledge that you have read, understood, and accepted this Risk Disclosure Statement. You acknowledge that you are aware of the risks involved in trading leveraged financial instruments and that your financial circumstances, investment objectives, and risk tolerance are consistent with such trading activity.
For questions about this Risk Disclosure, contact us at support@edgesyncmarkets.com