Investment Disclaimer

Last Updated: January 2025

Not Investment Advice

System Trader is for informational and educational purposes only. Nothing on this platform constitutes:

• Investment advice or recommendations
• Financial planning or tax advice
• An offer or solicitation to buy or sell any securities
• A recommendation to pursue any particular investment strategy
• Professional advice of any kind

You should always consult with qualified financial advisors, tax professionals, and legal counsel before making any investment decisions.

Backtested Performance Limitations

All performance results shown on System Trader are based on hypothetical backtested data. Backtested results have significant limitations:

• Hypothetical results: No actual money was invested or traded. Results represent what would have happened if the strategy had been followed historically.
• Hindsight bias: Backtests are designed with the benefit of hindsight and may not reflect real-world decision-making conditions.
• No execution costs: Results may not account for all real-world costs including commissions, slippage, bid-ask spreads, and market impact.
• Survivorship bias: The stock universe may not include companies that went bankrupt, were delisted, or otherwise ceased trading.
• Data quality: Historical data may contain errors, adjustments, or gaps that affect results.
• Market conditions change: Strategies that worked historically may not work in the future as market dynamics evolve.
• Overfitting risk: Strategies optimized on historical data may perform poorly on new, unseen data.

Past Performance Does Not Guarantee Future Results

This is perhaps the most important principle in investing. Historical returns, whether from actual trading or backtesting, provide no assurance of future performance. Market conditions, economic factors, and countless other variables make it impossible to predict future returns with certainty. A strategy that generated exceptional returns in the past may generate losses in the future.

Risks of Stock Trading

Trading stocks involves numerous risks, including but not limited to:

• Market risk: Stock prices can decline due to broad market movements regardless of individual company performance.
• Volatility risk: Stock prices can fluctuate significantly in short periods, leading to substantial gains or losses.
• Liquidity risk: Some stocks may be difficult to buy or sell quickly without affecting the price.
• Concentration risk: Holding a small number of stocks increases exposure to company-specific risks.
• Sector risk: Stocks in specific sectors may decline together due to industry-specific factors.
• Company-specific risk: Individual companies may face challenges that cause their stock prices to decline significantly or become worthless.
• Timing risk: Entering or exiting positions at unfavorable times can significantly impact returns.

Momentum Strategy Specific Risks

The momentum-based strategy presented on System Trader has specific risks:

• Momentum crashes: Momentum strategies can experience sudden, severe drawdowns when market trends reverse quickly.
• High turnover: Frequent trading increases transaction costs and may result in short-term capital gains taxes.
• Growth stock concentration: The stock universe focuses on high-growth stocks which tend to be more volatile.
• Model risk: The 7-factor scoring system is based on specific assumptions that may not hold in all market conditions.
• Crowding: Popular momentum strategies may become crowded, reducing their effectiveness.

No Guarantee of Accuracy

While we strive to provide accurate information, we make no representations or warranties about the accuracy, completeness, or reliability of any data, analysis, or content on System Trader. Information may contain errors, be outdated, or be incomplete. You should independently verify any information before relying on it for investment decisions.

Your Responsibility

By using System Trader, you acknowledge and agree that:

• You are solely responsible for your own investment decisions
• You understand the risks involved in stock trading
• You will conduct your own research and due diligence
• You will not invest money you cannot afford to lose
• You will seek professional advice if needed
• System Trader bears no responsibility for any investment losses you may incur

Regulatory Notice

System Trader is not a registered investment advisor, broker-dealer, or financial planner. We do not provide personalized investment advice. The information on this platform is general in nature and does not take into account your personal financial situation, investment objectives, or risk tolerance.