Risk Disclosure

This Risk Disclosure explains the risks of using Prefractal to automate trading. It forms part of, and should be read together with, our Terms of Service. Read it in full before you connect an exchange or deploy an agent. If you do not understand or accept these risks, do not use the platform.

Prefractal provides software for configuring and running automated trading agents that you connect to your own exchange accounts. You are the sole decision-maker and operator of your agents. Prefractal does not hold your funds, does not choose what you trade, and does not provide advice of any kind.

1. General risk warning

Trading financial instruments and crypto-assets carries a high level of risk. Before using Prefractal you should understand that:

• Markets are inherently risky and unpredictable, and no trading system or strategy can guarantee a profit.
• You may lose some or all of the funds held in the accounts you connect.
• Automated trading is not suitable for everyone.
• You should only trade with money you can afford to lose.

Past performance of any strategy, backtest, or simulation is not a reliable indicator of future results.

2. Market risks

Price volatility. Prices can move rapidly in response to economic news, political events, or market sentiment. Sharp moves can produce significant losses in a short period.

Crypto volatility. Crypto-assets trade continuously, including outside normal market hours, and can be substantially more volatile than equities. Extreme moves can occur at any time, including while you are not monitoring your agents.

Liquidity and slippage. Some assets have limited liquidity. Orders may fill at prices worse than expected, fill only partially, or be difficult to exit.

Gap risk. Equity prices can gap between trading sessions. Protective orders such as stop-losses may not execute at your intended price, or at all, during a gap.

3. Automated and strategy risks

Strategy failure. A strategy that performed well historically may fail under live conditions. Market behaviour changes, and rebalancing or grid logic that suited one regime may perform poorly in another.

Over-optimisation. A strategy tuned to past data may be over-fitted to that data and perform poorly in future markets.

Backtest and simulation limits. Backtested and paper-traded results are simulated. They do not represent real trading and do not reflect actual execution costs, slippage, latency, or market impact.

Unattended execution. Agents act autonomously on the parameters you set. A misconfigured agent can place trades you did not intend. You are responsible for the configuration you deploy and for monitoring its behaviour.

4. Technical and operational risks

• Software defects. The platform may contain bugs or errors that interfere with its use or affect trade execution.
• Connectivity. Internet, hosting, or network disruptions can delay or prevent an agent from placing or cancelling orders.
• Data quality. Inaccurate or delayed market data can lead to unintended trading decisions.
• Third-party dependencies. Prefractal relies on third parties we do not control, including Alpaca (equities execution), Kraken (crypto execution), and Stripe (payments). Outages, rate limits, or changes at these providers can interrupt trading or access to the platform.

5. Crypto-asset risks

Crypto-assets are a high-risk, largely unregulated asset class. Crypto-asset services accessed through Prefractal are not governed by MiFID II or the EU Markets in Crypto-Assets Regulation (MiCA) and do not carry equivalent regulatory protections. Crypto-assets held at an exchange are exposed to the operational, security, and solvency risks of that exchange.

6. Margin and leverage

Prefractal does not lend to you or provide leverage. If the exchange account you connect is enabled for margin or leverage, any agent you run may trade on that basis. Leverage amplifies both gains and losses, can result in losses greater than your initial deposit, and may expose you to margin calls or forced liquidation by your exchange without notice. You are solely responsible for the margin settings on your own accounts.

7. No investment advice

Prefractal is a technology platform, not a financial adviser. Prefractal does not provide financial, investment, legal, tax, or any other professional advice, and is not a broker, financial adviser, investment adviser, or portfolio manager. Nothing on the platform is a recommendation to buy or sell any asset, or a solicitation of any kind. You should consult a qualified professional before making investment decisions.

8. No regulatory protection

Prefractal is not authorised or regulated by any financial regulatory authority, including the Financial Conduct Authority (FCA) in the United Kingdom, the SEC or FINRA in the United States, or any competent authority under MiFID II or MiCA in the European Union. As a result, you do not have access to the Financial Services Compensation Scheme (FSCS) or the Financial Ombudsman Service (FOS), and your activity is not protected by SIPC or FDIC. The regulatory status section of our Terms of Service sets this out in full.

9. Governing law

This Risk Disclosure forms part of the Terms of Service and is governed by the laws of England and Wales. Nothing in this disclosure limits any statutory rights you have that cannot lawfully be excluded.

10. Acknowledgment

By using Prefractal, you acknowledge that:

• You have read and understood this Risk Disclosure.
• You understand that automated trading involves a substantial risk of loss.
• You are solely responsible for your trading decisions and for the agents you deploy.
• You are trading with capital you can afford to lose.
• To the extent permitted by law, Prefractal is not liable for losses resulting from market movements or from decisions you make using the platform.

Contact

Questions about the risks of using Prefractal: [email protected]