This is a working template prepared for review by qualified counsel in the United States, India, the United Kingdom and the European Union. It is not yet in force and creates no rights or obligations until a final version is published.
- Your capital is at risk. You can lose some or all of the money you invest.
- No model — ours included — can reliably predict prices. Simulations and paper results are not promises.
- Automation adds its own risks: outages, stale data, broker API failures and errors in software.
- Only invest money you can afford to lose, and keep an emergency fund outside your investments.
The summary helps you navigate; the sections below are the document.
1Capital at risk
The value of investments and any income from them can fall as well as rise, and you may get back less than you invested. Losses can be sudden and large. Investing is not a substitute for savings you need in the short term.
2Market risks
- Volatility: prices can move sharply, including in gaps between one session’s close and the next open.
- Liquidity: some securities trade thinly; orders may fill at worse prices, partially, or not at all.
- Concentration: holding few securities, one sector or one country increases risk.
- Currency: investing outside your home currency adds exchange-rate risk and FX costs.
- Interest rates, inflation and economic events can affect all asset classes at once; diversification reduces but does not remove risk.
3Leverage and derivatives
Margin, options, futures and other derivatives are switched off by default. Where you enable them and the law permits, losses can exceed your initial investment and happen very quickly. In India, SEBI studies have found that the large majority of individual traders in equity derivatives lose money. CFDs and spread bets are never offered.
4AI and model risks
- Language models can produce plausible but wrong analysis, misread documents or cite sources inaccurately.
- Quantitative models are fitted to past data; market regimes change and relationships that held in the past can break.
- Confidence scores are estimates. A 60% confidence means the idea is expected to be wrong about 40% of the time even if the model is well calibrated.
- Many users acting on similar signals could move prices against them; we stagger execution to reduce this but cannot remove it.
- The engine is designed to abstain when evidence is weak, which means it can also miss gains.
5Back-tests, simulations and paper trading
Back-tests apply rules to historical data with hindsight; they can overstate results through overfitting, survivorship bias and unrealistic cost or fill assumptions. Paper trading uses simulated fills that may be better than real fills. Goal probabilities come from statistical simulations with assumptions that may not hold. None of these is a reliable indicator of future results.
6Technology and automation risks
- Internet, cloud, exchange or broker outages can delay or prevent orders, including orders to reduce risk.
- Broker APIs can change, rate-limit or reject orders; many Indian brokers require daily re-authorisation, and if you do not re-authorise, no orders can be sent that day.
- Market data can be delayed or wrong; the risk gate blocks orders on stale data, which may mean an intended trade does not happen.
- Software can contain errors despite testing. The kill switch and policy limits reduce but do not eliminate this risk.
7Broker and counterparty risk
Your assets are held by your broker, not by AlgoNexus. Investor-protection schemes depend on your broker and country (for example SIPC in the US, the FSCS in the UK, national investor-compensation schemes in the EU, and exchange investor-protection funds in India) and do not protect against investment losses.
8Tax and costs
Fees, taxes and levies reduce returns, and frequent trading increases them. Tax estimates are not tax advice and depend on your circumstances and on laws that can change. Consult a qualified adviser.
9Regulatory status
AlgoNexus is not currently authorised to provide personal investment advice or to manage investments in any market. Until it is, outputs are general information and live execution is disabled. Regulatory protections that apply to authorised firms, such as access to an ombudsman or compensation scheme for our own conduct, do not yet apply to us. See Regulatory Status.
10Market-specific statements
- India: Investments in the securities market are subject to market risks. Read all related documents carefully before investing. Once registered: registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.
- United Kingdom: Don’t invest unless you’re prepared to lose all the money you invest. Final wording to follow FCA financial-promotion rules for the specific product.
- European Union: Key information documents (PRIIPs KIDs and UCITS KIIDs) for products you buy are provided by your broker or the product manufacturer. Read them before investing.
- United States: Investments are not FDIC-insured, are not bank deposits and may lose value.