Risk Disclosure Statement

Understanding the risks involved in AI-powered cryptocurrency trading

High Risk Warning
Capital at Risk
Required Reading

Critical Risk Warning

AI TradingBot involves substantial risk of financial loss. You can lose some or all of your invested capital.

This is not investment advice. AI TradingBot is a trading tool, not a guaranteed profit system. Past performance does not guarantee future results.

IMPORTANT: Only trade with money you can afford to lose. Never trade with essential funds needed for living expenses, debt payments, or emergency savings.

Risk Categories

Market Risk

Price volatility

AI Risk

Algorithm limitations

Technical Risk

System failures

Liquidity Risk

Exit difficulties

Your Understanding & Acceptance

By using AI TradingBot, you confirm that you understand and accept these risks.

Risks Acknowledged

Market Risk (High Risk)

Price volatility and market movements

Cryptocurrency Volatility

Cryptocurrency markets are extremely volatile. Prices can fluctuate wildly within minutes or hours.

Typical Daily Movement

5-20%

Extreme Daily Movement

30-50%+

Volatility Factors:

  • News & announcements: Market reactions to news can be immediate and severe
  • Regulatory changes: Government actions can dramatically affect prices
  • Market sentiment: Fear and greed cycles drive extreme price movements
  • Liquidity changes: Low liquidity can amplify price swings

Historical Market Crashes

Bitcoin 2017-2018

Peak to trough decline

-84%

Altcoin Bear Markets

Many coins lost 90-99%

-90% to -99%

Flash Crashes

Intraday sudden drops

-30% to -50% in minutes

Important: Past market behavior indicates the potential for similar or greater losses in the future.

AI Algorithm Risk (High Risk)

Limitations of automated trading systems

Algorithm Limitations

No Predictive Power

AI algorithms analyze patterns but cannot predict future prices. They make educated guesses based on historical data, which may not repeat.

Black Box Nature

Complex AI models can be difficult to interpret. It may not be clear why certain trading decisions are made.

Overfitting Risk

Algorithms may perform well on historical data but fail in live markets due to over-optimization for past conditions.

Trading Scenario Risks

Whiplash Losses

Rapidly changing market conditions causing multiple consecutive losing trades

Strategy Decay

Previously successful strategies becoming ineffective as market dynamics change

Parameter Sensitivity

Small changes in bot settings leading to significantly different (often worse) results

Black Swan Events

Unprecedented market events that algorithms are not trained to handle

Important AI Limitation

AI TradingBot cannot account for fundamental analysis, breaking news, or regulatory announcements that significantly impact markets. The AI only analyzes price and volume data.

Technical Risk (Medium Risk)

System failures and connectivity issues

System Failure Risks

API Connectivity Issues

Exchange API outages or rate limits can prevent trade execution

Result: Missed opportunities or failed stop-losses

Platform Downtime

AI TradingBot server maintenance or unexpected outages

Result: Trading pauses during critical market moves

Internet Connectivity

Your local internet connection issues

Result: Inability to monitor or adjust bots

Software Bugs

Undetected bugs in AI TradingBot software

Result: Incorrect trade execution or position sizing

Latency & Execution Risks

Network Latency

• Delays between signal generation and trade execution

• Price slippage during high volatility

• Failed orders due to rapid price changes

Exchange Issues

• Exchange maintenance windows

• Order book manipulation on some exchanges

• Unplanned exchange outages

Mitigation: We implement redundancy and monitoring systems, but cannot guarantee 100% uptime. Always have contingency plans.

Liquidity Risk (Medium Risk)

Difficulty entering or exiting positions

Liquidity Challenges

Low Volume Assets

Trading smaller or newer cryptocurrencies may lack sufficient liquidity for large orders, causing significant price impact.

Market Hours

Cryptocurrency trades 24/7, but liquidity varies by time zone and trading hours.

Withdrawal Limits

Exchanges may impose withdrawal limits or delays, especially during high volatility.

Price Impact Scenarios

Order Size Asset Liquidity Price Impact Risk Level
$1,000 High (BTC/ETH) 0.1-0.5% Low
$10,000 Medium (Top 20) 1-3% Medium
$10,000 Low (Small Cap) 5-20%+ High
$50,000+ Any Asset Significant Very High

Liquidity Warning

During market panics or crashes, liquidity can evaporate rapidly. You may be unable to exit positions at desired prices, potentially locking in larger losses.

Additional Risks

Other important risk considerations

Regulatory Risk

Sudden regulatory changes banning or restricting crypto trading

Exchange shutdowns due to regulatory pressure

Tax law changes affecting cryptocurrency holdings

Counterparty Risk

Exchange insolvency or hacking

Withdrawal freezes during market stress

API key security breaches

Operational Risk

Incorrect bot configuration by user

Failure to monitor bot performance

Psychological factors affecting decision-making

Financial Risk

Leverage trading magnifies losses

Compounding fees reduce returns

Tax implications on trading profits

Risk Management Guidelines

How to manage trading risks responsibly

Essential Risk Management Practices

1

Capital Allocation

Never risk more than 1-2% of total capital per trade

2

Stop-Loss Orders

Always use stop-losses to limit potential losses

3

Diversification

Spread risk across different assets and strategies

4

Regular Monitoring

Check bot performance regularly, don't "set and forget"

5

Risk Assessment

Understand each bot's risk profile before using

6

Emotional Control

Stick to your strategy, don't make emotional decisions

Recommended Trading Capital

Risk Capital Only

Money you can afford to lose completely

100%

Guideline: If losing your entire trading capital would significantly impact your quality of life or financial security, you are trading with too much money.

Risk Acknowledgement

By using AI TradingBot, you acknowledge that you have read, understood, and accept all risks described in this disclosure.

I understand that:

I can lose some or all of my invested capital

I understand that:

Past performance does not guarantee future results

I understand that:

AI trading involves algorithmic limitations

I understand that:

Cryptocurrency markets are highly volatile

FINAL WARNING: If you do not fully understand these risks or cannot afford potential losses, do not use AI TradingBot.

Risk | OonDex AI
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