Risk Disclosure Statement

1. General Investment Risks

All investments involve risk, including the potential loss of principal. Before making any investment decision, you should carefully consider:

• Your investment objectives and risk tolerance
• Your financial situation and needs
• Your investment time horizon
• The risks associated with specific investments
• The tax consequences of your investment decisions
• Your level of investment knowledge and experience

2. Market Risk

Market risk is the risk that the value of securities will fluctuate due to changes in market conditions:

• Volatility Risk: Prices can change rapidly and unpredictably
• Liquidity Risk: You may not be able to sell securities when desired
• Systemic Risk: Market-wide events can affect all securities
• Gap Risk: Prices can gap significantly between trading sessions
• Black Swan Events: Rare but severe market disruptions can occur

3. Options Trading Risks

Specific Options Risks Include:

• 100% Loss Risk: Options can expire worthless, resulting in total loss of premium paid
• Time Decay: Options lose value as expiration approaches
• Complexity: Options strategies can be complex and difficult to understand
• Assignment Risk: Short options can be assigned at any time
• Leverage Risk: Small price movements can result in large percentage gains or losses
• Implied Volatility Risk: Changes in IV can significantly impact option prices
• Early Exercise Risk: American-style options can be exercised before expiration

4. Leverage and Margin Risks

Using leverage or trading on margin amplifies both potential profits and losses:

• You can lose more money than you initially invested
• Margin calls may force you to sell securities at a loss
• Interest charges on margin loans reduce returns
• Broker may liquidate positions without your consent
• Leverage can lead to rapid account depletion

5. Technology and Platform Risks

Using electronic trading platforms and analytical tools involves specific risks:

• System Failures: Technical issues may prevent order execution
• Internet Connectivity: Connection problems can impact trading
• Data Delays: Market data may be delayed or inaccurate
• Software Bugs: Errors in calculations or displays may occur
• Cyber Security: Risk of hacking or unauthorized access
• Platform Limitations: Features may not work as expected

6. Algorithmic and AI Trading Risks

Using algorithmic trading strategies and AI predictions involves additional risks:

• Algorithms may malfunction or behave unexpectedly
• AI predictions are based on historical data and may not predict future events
• Model risk: strategies may not work in all market conditions
• Over-optimization can lead to poor real-world performance
• Rapid automated trading can amplify losses
• Competition from other algorithmic traders

7. Information and Analysis Risks

Important considerations regarding information provided:

• All information is for educational purposes only
• Not personalized investment advice
• Past performance does not guarantee future results
• Hypothetical performance has inherent limitations
• Technical analysis is not always accurate
• Social sentiment may not reflect market reality
• News and data may be delayed or incorrect

8. Psychological and Behavioral Risks

Trading psychology can significantly impact investment outcomes:

• Emotional Trading: Fear and greed can lead to poor decisions
• Overconfidence: Past success may lead to excessive risk-taking
• Revenge Trading: Trying to recover losses can amplify them
• FOMO: Fear of missing out can lead to impulsive trades
• Addiction Risk: Trading can become compulsive
• Stress: Financial losses can impact mental health

9. Specific Product Risks

9.1 Day Trading

• Most day traders lose money
• Requires substantial time and attention
• Pattern day trader rules may apply
• High transaction costs erode profits

9.2 Penny Stocks

• Extremely high volatility
• Limited liquidity
• Potential for manipulation
• Limited information available

9.3 Cryptocurrency

• Extreme price volatility
• Regulatory uncertainty
• Security risks (hacking, theft)
• 24/7 market trading

10. Regulatory and Legal Risks

Various regulatory and legal risks may affect your trading:

• Changes in tax laws affecting investment returns
• Regulatory changes affecting trading rules
• International trading restrictions
• Account restrictions or freezes
• Compliance with pattern day trader rules
• Wash sale rules affecting tax treatment

11. No Guarantee of Profits

Important facts to understand:

• Most retail traders lose money
• Professional traders also experience losses
• No strategy works 100% of the time
• Markets can remain irrational longer than you can remain solvent
• Even correct analysis can result in losses
• Winning streaks can be followed by losing streaks

12. Risk Management Recommendations

While not investment advice, consider these risk management principles:

• Never invest more than you can afford to lose
• Diversify your investments
• Use stop-loss orders to limit losses
• Start with paper trading to practice
• Educate yourself before trading
• Keep detailed records of trades
• Have a written trading plan
• Avoid trading with borrowed money
• Take breaks when experiencing losses
• Seek professional advice when needed

13. Acknowledgment and Acceptance

By using TradeLumina's services, you acknowledge that:

• You have read and understood this Risk Disclosure Statement
• You understand the risks involved in trading
• You are solely responsible for your investment decisions
• You will not hold TradeLumina liable for trading losses
• You have the financial capacity to bear losses
• You will seek independent advice if needed

14. Additional Resources

For more information about investment risks:

• SEC Investor.gov: www.investor.gov
• FINRA: www.finra.org
• CFTC: www.cftc.gov
• Options Clearing Corporation: www.theocc.com
• National Futures Association: www.nfa.futures.org

15. Contact Information

If you have questions about this Risk Disclosure Statement:

• Email: risk@tradelumina.com
• Phone: 1-800-LUMINA-1
• Mail: TradeLumina Risk Management, 1000 Brickell Avenue, Suite 500, Miami, FL 33131