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Risk and Loss in Futures Trading

The regulatory agencies which oversee the futures markets, namely the Commodity Futures Trading Commission and the National Futures Association, have imposed certain specific requirements on those who are members of these organizations. Failure to comply with the regulaВэtions of these agencies can result in expulsion from membership, repriВэmand, and/or monetary penalties. Although I am certain you are all already aware of this fact, I am required, therefore, to warn you and remind you (in case you didn't already know) that there is a risk of loss in futures trading.

I am also required by law to give you the following disclaimer.

The CFTC requires we state thatтАФnotice: Hypothetical or simulated performance results have certain limitations. Unlike an actual perВэformance record, simulated results do not represent actual trading. Also since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of cerВэtain market factors, such as lack of liquidity. Simulated trading proВэgrams in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The risk of loss in futures trading can be substantial. You should carefully consider whether such trading is suitable for you in light of your financial condition. Past results are not indicaВэtive of future results. There is a risk of loss in futures trading

Furthermore, I am also required to mention repeatedly the potential for risk whenever the potential for profit is mentioned throughout the course of this book. I feel that all of you already know the risks, and I resent having to repeat them. It is a waste of space and time, and it is an insult to your intelligence and mine. Consequently, I will do so, not by choice, but by the necessity of regulatory dictate.