Risk Disclosure Statement

Important information about trading and investment risks

Critical Risk Warning

Trading in stock markets, derivatives, or cryptocurrencies carries a high level of risk and may not be suitable for all investors.

You may sustain a partial or complete loss of your invested capital.You should only trade with money you can afford to lose completely.

Before deciding to trade, you should carefully consider your investment objectives, level of experience, and risk appetite.

General Investment Risks

1. Market Risk

  • Stock prices can fluctuate widely due to market conditions
  • Economic factors, political events, and global crises can impact markets
  • Market sentiment can change rapidly and unpredictably
  • Bull markets can turn into bear markets without warning

2. Company-Specific Risk

  • Individual companies may face operational challenges
  • Management decisions can significantly impact stock performance
  • Earnings reports may not meet market expectations
  • Regulatory changes can affect specific sectors or companies

3. Liquidity Risk

  • Some stocks may have limited trading volume
  • You may not be able to sell your holdings when desired
  • Low liquidity can lead to wider bid-ask spreads
  • Emergency exits may result in significant losses
Trading-Specific Risks

1. Technical Analysis Limitations

  • Technical indicators are based on historical data and may not predict future movements
  • False signals can occur, leading to unprofitable trades
  • Market conditions can change faster than technical indicators can adapt
  • Over-reliance on technical analysis can lead to significant losses

2. Timing Risk

  • Attempting to time the market is extremely difficult
  • Early entries or late exits can result in losses
  • Market gaps can occur overnight or during non-trading hours
  • Stop-loss orders may not execute at intended prices

3. Leverage and Margin Risk

  • Leverage amplifies both gains and losses
  • Margin calls can force liquidation at unfavorable prices
  • Interest costs on borrowed funds can accumulate quickly
  • High leverage can lead to total capital loss
Psychological and Behavioral Risks

1. Emotional Trading

  • Fear and greed can lead to poor decision-making
  • FOMO (Fear of Missing Out) can result in impulsive trades
  • Loss aversion may prevent cutting losses early
  • Overconfidence can lead to excessive risk-taking

2. Cognitive Biases

  • Confirmation bias may lead to ignoring contrary information
  • Anchoring bias can affect entry and exit decisions
  • Recency bias may overweight recent market performance
  • Overconfidence bias can result in inadequate risk management
Technology and Data Risks

1. Data Accuracy

  • Real-time data feeds may have delays or errors
  • Historical data may contain inaccuracies
  • Third-party data providers may experience outages
  • Price discrepancies between different sources can occur

2. Platform Risk

  • Trading platforms may experience technical failures
  • Internet connectivity issues can prevent trading
  • System maintenance may limit access during critical times
  • Mobile apps may have limitations compared to desktop platforms
Regulatory and Legal Risks

1. Regulatory Changes

  • New regulations may affect trading strategies
  • Tax laws can change and impact investment returns
  • SEBI guidelines may introduce new restrictions
  • Global regulatory changes can affect Indian markets

2. Compliance Risk

  • Investors are responsible for compliance with all applicable laws
  • Tax obligations must be met regardless of trading outcomes
  • Documentation and record-keeping requirements may apply
  • Penalties for non-compliance can be substantial
Risk Management Guidelines

Essential Risk Management Practices:

  • Never invest more than you can afford to lose completely
  • Diversify your portfolio across different assets and sectors
  • Set stop-loss levels before entering any position
  • Use position sizing to limit exposure to any single trade
  • Maintain an emergency fund separate from trading capital
  • Continuously educate yourself about markets and risk management
  • Consider consulting with qualified financial professionals
  • Keep detailed records of all trades and their rationale
Professional Financial Advice

We strongly recommend consulting with SEBI-registered financial advisors before making any investment decisions.

Professional advisors can help you:

  • Assess your risk tolerance and investment objectives
  • Develop a suitable investment strategy
  • Understand tax implications of your investments
  • Create a diversified portfolio appropriate for your situation
  • Monitor and adjust your investments over time

Risk Acknowledgment

By using Trade Navigator, you acknowledge that you have read, understood, and accepted all the risks outlined in this disclosure statement. You confirm that you are prepared for the possibility of financial loss and will not hold Trade Navigator responsible for any trading losses you may incur.

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