Risk disclosure notice

Last updated: October 17th, 2024
Version: 1.0

1. Introduction

1.1. Welcome to the risk disclosure notice of https://nomotrade.com (hereinafter referred to as "we," "us," "nomo," the "platform", "website").

1.2. The Platform is operated by Nomo Trade Limited, an International Business Company number 2023-00509 in Saint Lucia. The registered office is situated at Ground Floor, The Sotheby Building, Rodney Village, Rodney Bay, Gros-Islet, LC01 401, Saint Lucia. The physical office is located at 1344 Mariano Roque Alonso Street, Asunción, 001005, Paraguay.

1.3. Investments in financial instruments are inherently subject to market risks. Certain financial products, particularly those involving currency exchange, are characterized by high speculation, necessitating prudent investment with risk capital exclusively. Engaging in foreign exchange trading on margin entails a substantial risk level and may not be suitable for all investors. Leverage, being a double-edged sword, can either amplify gains or losses. Prior to committing to foreign exchange investments, it is imperative to diligently assess one's investment objectives, level of experience, and risk tolerance. There exists a plausible scenario wherein a loss, either partial or total, of the initial investment may occur. Consequently, investing funds that exceed one's financial capacity to absorb losses is strongly discouraged. Acquaintance with all risks associated with foreign exchange trading is essential, and seeking advice from an independent financial advisor is recommended. By initiating a trading account with us, you, as the User, attest to comprehending the inherent risks, possessing financial capacity, and mental preparedness for the risks involved in speculating or trading contracts or other financial products from over-the-counter markets provided by nomo. We strongly advocate reading through and seeking professional advice regarding the ensuing risks.

2. CFDs risk disclosure

2.1. CFDs, or contracts for difference, constitute agreements between two parties, commonly referred to as the "buyer" and "seller." In these agreements, the seller commits to paying the buyer the discrepancy between the current value of an asset and its value at the time of the contract. If this difference is negative, the buyer, in turn, pays the seller. Essentially, CFDs function as financial derivatives enabling investors to capitalize on price movements, either upward (long positions) or downward (short positions), in underlying financial instruments. They are frequently employed for speculative purposes in various markets.

2.2. When applied to equities, a CFD serves as an equity derivative, offering investors a means to speculate on share price fluctuations without the necessity of owning the actual underlying shares.

2.3. It is crucial to note that this document does not provide a comprehensive disclosure of all associated risks or other critical aspects related to CFDs. It should not be interpreted as investment advice or a recommendation for engaging in any service or investing in any financial instrument.

2.4. Potential Users should refrain from executing any transactions involving CFDs or other financial instruments unless they possess a complete understanding of their nature, the inherent risks, and the extent of their exposure to these risks. In situations of uncertainty regarding the significance of any of the warnings outlined in this document, Users are advised to seek independent legal or financial advice before making any investment decisions.

2.5. The user should additionally acknowledge that:

  • The value of any investment in financial instruments is subject to fluctuation, either decreasing or increasing, and there is a possibility that the investment could diminish to the point of becoming worthless.

  • Past returns should not be viewed as indicative of potential future returns.

  • Engaging in the trading of financial instruments may involve tax implications and/or other duties.

  • Fluctuations in exchange rates may have adverse effects on the value, price, and/or performance of financial instruments traded in a currency different from the User's base currency.

3. Risks associated with CFDs

3.1. Leverage risk

Leverage is a distinctive feature of CFDs, introducing increased risk compared to direct investments in underlying assets. The margining system applied to CFDs involves a relatively small deposit relative to the transaction size. Consequently, even a minor price movement in the underlying asset can have a disproportionate impact on a User's trade. While a favorable price movement can yield high returns, an unfavorable one may lead to significant losses swiftly.

3.2. Gapping risk

Market volatility in financial markets can result in rapid fluctuations in CFD prices, giving rise to gapping risk. Gapping occurs when CFD prices swiftly jump from one level to another without traversing the levels in between. This swift movement may limit the User's ability to place orders between the two price levels.

nomo provides the option of implementing Stop Loss Orders to mitigate potential losses from an open position. These orders automatically close positions when a specified price limit is reached. However, certain situations, such as rapid price movements or market closure, may render the 'stop loss' limit ineffective.

To maintain open CFD positions, the user must ensure adequate funds in their account to cover margin obligations. Failure to cover margin obligations promptly may necessitate immediate depositing of additional cleared funds or closing positions. Margin shortages can arise rapidly with changing market values. Without sufficient funds, there is a risk of involuntary position closures.

The user's account value must consistently remain above the liquidation or close-out level. If it falls below this level, the User's CFD trades face the possibility of liquidation. To prevent liquidation, the User must deposit enough funds to keep the account value above the liquidation level. In cases where the User's trade deviates from expectations, additional fund deposits may be required to maintain the position.

3.3. Risk of loss of invested funds

The potential for adverse market movements exists, and such movements may lead to the complete loss of your account balance or even exceed it. Should your losses surpass your current account balance, the negative consequences of these adverse events will be borne by us, and your losses will be confined to your prevailing account balance at that time.

3.4. No guarantee of profit

There are no assurances of profit or immunity from losses in CFD trading. nomo and its representatives do not intend to provide, nor are they able to provide, guarantees of this nature. This statement serves as an alert to the User that inherent risks are associated with trading CFDs. The User must possess the financial capacity to withstand such risks and absorb any resulting losses.

It is essential to recognize that you possess neither rights nor obligations concerning the underlying instruments or assets linked to your CFD. CFDs may have diverse underlying assets, encompassing equity, indices, and commodities. In the case of an equity CFD, for instance, you will not be entitled to any voting rights. This clarification is particularly relevant for the User's understanding of the distinctive features of CFDs across various asset classes.

4. CFDs risk disclosure

4.1. The risk of loss in Forex (foreign exchange) trading can be substantial. It is crucial to carefully evaluate whether participating in such trading aligns with your financial situation. When considering whether to trade or authorize someone else to trade on your behalf, it is vital to be aware of the following:

  • Forex, or foreign exchange, transactions do not take place on an exchange, and funds deposited with the counterparty for Forex transactions may not have the same protections as funds used to margin or guarantee exchange-traded futures and options contracts.

  • In the event of the counterparty's insolvency and your claim for amounts deposited or profits earned on Forex transactions, your claim may not be prioritized. Without priority, you would be categorized as a general creditor, and your claim, along with other general creditors, may not be satisfied with any remaining funds after priority claims are settled.

  • Even if User’s funds are kept separate from the counterparty's operating funds, they may not be entirely shielded from the claims of other general and priority creditors.

  • The high degree of leverage often available in Forex trading can work both for and against you, potentially resulting in significant losses.

4.2. It is crucial to note that this brief statement cannot cover all the risks and significant aspects of the Forex (foreign exchange) markets. Further research and understanding are recommended before engaging in Forex trading.

5. Risks associated with CFDs

5.1. High-risk investment

Trading off-exchange foreign currencies on margin entails a substantial level of risk and may not be suitable for all investors. The considerable leverage involved can either work in your favor or against you. Before making the decision to trade foreign exchange, a thorough consideration of your investment objectives, experience level, and risk appetite is crucial. There exists the possibility of sustaining a loss of some, all, or more than your initial investment. Therefore, it is imperative not to invest money that you cannot afford to lose. Awareness of all the risks associated with foreign exchange trading is essential, and seeking advice from an independent financial advisor is recommended in case of any doubts.

5.2. Internet trading risks

Utilizing an Internet-based deal execution trading system introduces risks, including but not limited to, potential failures of hardware, software, and Internet connection. As nomo lacks control over signal power, its reception, or routing via the Internet, and cannot oversee the configuration of your equipment or the reliability of its connection, we disclaim responsibility for communication failures, distortions, or delays during Internet trading. nomo futures employs backup systems and contingency plans to minimize the risk of system failure, and telephone trading remains available at all times.

5.3. Accuracy of information

The content on this Website is subject to change without notice and is provided solely for the purpose of assisting traders in making independent investment decisions. While nomo has implemented reasonable measures to ensure the accuracy of the information on the Website, it does not guarantee its accuracy. nomo will not accept liability for any loss or damage that may arise directly or indirectly from the content or your inability to access the Website, or for any delay in or failure of the transmission or receipt of any instruction or notifications sent through this website. Users are advised to independently verify the information and acknowledge the inherent risks associated with trading.

6. Other risks

6.1. Market risk

Market risk is the potential decrease in the value of a portfolio resulting from changes in market factors such as stock prices, interest rates, exchange rates, and commodity prices. In the event of adverse price fluctuations, the user faces the risk of partial or complete loss of invested capital.

6.2. Systemic risk

Systemic risk is the threat of a collapse in the entire market or financial system. It encompasses risks associated with interdependencies in a system or market, where the failure of a single entity or cluster of entities can trigger a cascading negative effect, potentially leading to the collapse of the entire system or market.

6.3. Technical risk

Technical risk involves the potential for faults in electronic equipment used for margin trading and investment operations, leading to unexpected and unpredictable outcomes, resulting in losses in the international exchange market (Forex). Transactions carried out via an electronic trading system expose the User to risks related to possible system faults, including equipment and software failures.

6.4. Operational risk

Operational risk is the risk of business operations failing due to human error. This risk varies across industries and is a crucial consideration when evaluating potential investment decisions. Industries with lower human interaction are likely to have lower operational risk.

6.5. Country risk

Country risk is the risk that returns on an investment may suffer due to political changes or instability in a country. Instability affecting investment returns could arise from changes in government, legislative bodies, foreign policy makers, or military control.

6.6. Interest rate risk

Interest rate risk is the potential change in the value of an investment due to a change in absolute interest rates, the spread between two rates, the shape of the yield curve, or any other interest rate relationship. Exchange Rate Risk is the risk of an investment's value being affected by changes in exchange rates.

6.7. Regulatory risk

Regulatory risk involves the potential impact on the value of an investment due to changes in laws or regulations by the government or regulatory bodies. Such changes may increase operating costs, reduce the attractiveness of an investment, alter the competitive landscape, and materially affect the overall profit potential of the investment. This risk is unpredictable and may vary depending on the market for the underlying asset of a given CFD and/or the Forex investment.

6.8. Electronic and online trading risks

Engaging in online trading carries inherent risks due to potential variations in system response times and access availability influenced by market conditions, system performance, and other factors. It is imperative that you comprehend these risks along with additional considerations before participating in trading activities. As a User, you are accountable for addressing technical issues, including but not limited to:

  • Hardware and software functionality.

  • Internet connection reliability.

  • MetaTrader installation and settings.

  • Compatibility of trading platforms on PCs and mobile devices.

  • Electrical supply to support uninterrupted trading operations.

6.9. Cryptocurrency risk

Trading Cryptocurrencies on margin involves a substantial level of risk and may not be suitable for all individuals. Past performance is not indicative of future results. Before engaging in Cryptocurrency trading, careful consideration of personal venture objectives, experience level, and risk appetite is imperative. The potential exists for the loss of some or all of the initial deposit; hence, funds should only be invested if they can be afforded to be lost. Full awareness of the risks associated with Cryptocurrency trading is advised, and seeking advice from an independent financial advisor in case of doubts is strongly recommended.

6.10. Leverage and margin trading by third party traders or agent risk

It is strictly prohibited for the user to utilize any third party traders or agent service for trading or use any service of the platform on behalf of the user. However, if a user of nomo chooses to use such services and discloses personal information, the user should understand that the security of their personal information becomes the responsibility of such third party traders or agent. nomo bears no responsibility for the privacy policies of external Websites of any such third party traders or agent engaged by the user.

nomo is not obligated to review third party traders or agents selected by users to handle their accounts and is not liable for any losses incurred by such user. Users are responsible for their decision in appointing and authorizing such parties. Disputes arising from such relationships should be resolved between the user and authorized third party traders or agents. nomo only acknowledges trades executed from the user trading account terminal and will not be held liable for account access or trade execution by other means. It is strongly recommended to exercise caution and maintain the security of trading passwords to prevent disputes.

6.11. Slippage risk

nomo's commitment not to seek redress for slippage and its obligation to execute Stop Loss Orders at the stop loss price or better do not apply to Limit and Stop Loss Orders during market hours, including price spikes. While Stop Loss Orders or Stop Limit Orders intended to limit losses may reduce losses incurred by price fluctuations, execution under certain market conditions, such as news releases or key economic indicators, may not be possible. nomo is not liable for any loss or damage, including loss of profit, arising directly or indirectly due to market volatility or abnormal market conditions.

6.12. Trade execution risk

Upon execution of trades from the user account terminal, they cannot be canceled or reversed. Any other instructions related to a particular trade will not be applied until the completion of execution. Users should verify trade details, such as volume, product, price levels, desired entry and exit point, before executing trades. trade transactions are performed on a first-in-first-out basis.

6.13. Bankruptcy and nomo insolvency risk

In the event of Bankruptcy or nomo insolvency, priority will be given to creditors. Trades/contracts/transactions executed on nomo are not traded on exchanges, and users' funds' protection differs from that of exchange-traded funds. In the event of the nomo's insolvency, users will be paid from available funds after priority claims are settled.

6.14. Trading strategies risk

All trading strategies are utilized at the user's own risk. Content on blazemarkets.com should not be relied upon as advice or construed as providing recommendations. It is the user's responsibility to confirm and decide on trades, utilizing risk capital—trading with money that, if lost, will not adversely impact their lifestyle and financial obligations. Past results do not indicate future performance. In no event should the content of this correspondence be construed as an express or implied promise or guarantee. nomo is not responsible for losses incurred due to trading strategies. Loss-limiting strategies, such as stop loss orders, may be ineffective due to market conditions or technological issues. Similarly, strategies using combinations of options and/or futures positions may be just as risky as simple long and short positions. No guarantee of any kind is implied or possible when attempting projections of future conditions.

4. Risks beyond the control of platform

7.1. The User, and not the platform bears complete responsibility for the following risks, the enumeration of which is not exhaustive:

  • Lack of knowledge of the trading account terminal settings. The user is responsible for any lack of familiarity with the settings of the trading account terminal.

  • Technical faults in the user’s software. The user assumes responsibility for any technical malfunctions occurring in their software.

  • Disclosure of registration credentials to third parties at the opening of the real account. The user is entirely liable for any unauthorized sharing of registration credentials when opening a real account.

  • Unauthorized access by a third party to the personal email account of the user. The user bears full responsibility for unauthorized access to their personal email account by third parties.

  • Reading with a delay of information sent to the user’s email address. Delays in reading information sent to the User’s email address are the user's responsibility.

  • Any other force-majeure circumstances on the part of the user. The user is accountable for any other unforeseen circumstances beyond the platform's control.

7.2. nomo explicitly disclaims any liability for loss or damage, including, but not limited to, loss of profit, arising directly or indirectly from human errors or technical issues. Risks associated with utilizing an Internet-based deal execution trading system encompass potential failures in hardware, software, and Internet connections. Since nomo lacks control over signal power, reception, or routing via the Internet, as well as the configuration and reliability of your equipment, the company cannot be held responsible for communication failures, distortions, or delays during online trading. nomo has implemented backup systems and contingency plans to minimize the likelihood of system failures.