What should a prop firm's risk disclosure say?
Quick answer
A risk disclosure should explain that trading involves significant risk, that most traders do not pass evaluations, that accounts are simulated, that past or demonstrated results do not guarantee future results, and that the evaluation fee may be lost. It should be easy to find, not buried.
Detailed answer
General information, not legal, tax or regulatory advice. Rules differ by country and change over time; confirm your position with a qualified professional before acting on it.
Elements of a clear risk disclosure:
- Trading risk: leveraged trading can lose money quickly.
- Simulated accounts: results are produced by simulation against market prices.
- No guarantee: passing and earning payouts is not assured.
- Fee risk: the evaluation fee is spent whether or not the trader passes.
- Not advice: the firm does not give investment advice.
- Hypothetical results: examples are illustrative.
Place it on the website footer, at checkout and in the terms. This is general information, not legal advice; adapt it with your lawyer to the rules of your markets.
Make it readable
Write the disclosure in plain sentences rather than dense legal text. A short version on the website with a link to the full version is common practice.
Keep it accurate
If your product changes, for example adding real execution for some traders, update the disclosure at the same time.
Example opening line
"Trading involves substantial risk. Our accounts are simulated, and most traders do not pass the evaluation."
PropExecutor team · Updated
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