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Risk Disclosure

Last updated: May 1, 2026

StratSmith, LLC ("StratSmith," "we," "us," or "our") provides a research and analysis platform that allows users to design, backtest, optimize, and validate trading strategies. By accessing or using stratsmith.io or any associated applications or services (collectively, the "Platform"), you acknowledge that you have read, understood, and accepted the risks described in this Risk Disclosure (this "Disclosure"), our Terms of Service, and our Privacy Policy.

This Disclosure is not a substitute for professional advice. It does not describe every risk associated with the Platform or with trading. You should consult qualified financial, legal, tax, and other advisors before making any trading or investment decision.

Capitalized terms not defined in this Disclosure have the meanings given in our Terms of Service.

1. About the Platform

StratSmith provides software tools for the design, backtesting, optimization, and validation of trading strategies. Users build their own strategies - either by writing strategy code directly, by using the Platform's natural-language strategy assistant, or by combining the two - and run those strategies against historical market data made available through the Platform.

StratSmith is not a broker, a trading platform, an investment adviser, a commodity trading advisor, a commodity pool operator, or any other regulated financial entity. We do not execute trades, hold customer funds, accept orders, or provide personalized trading advice or recommendations. We do not register, supervise, or evaluate the strategies that users build on the Platform. The Platform is a research and analysis tool, and any strategy a user creates, runs, shares, or eventually trades is the user's own.

The Platform currently supports research on futures markets. We expect to add support for additional asset classes - including, potentially, cryptocurrency and equity markets - over time. Adding new asset classes may introduce additional risks not described in this Disclosure, and we may update this Disclosure when we do.

2. Hypothetical and Backtested Performance: The Core Limitation

A backtest is not a forecast. Every result the Platform produces - equity curves, P&L figures, Sharpe ratios, drawdown statistics, optimization heatmaps, walk-forward analyses, Monte Carlo simulations - is hypothetical. None of it represents actual trading. None of it represents money that was actually made or lost. None of it guarantees, predicts, or even reliably suggests how a strategy will perform in live markets.

Hypothetical performance results have inherent limitations. Among them:

Hindsight bias and overfitting. Backtests rely on historical data. To the extent you design, calibrate, or optimize a strategy based on past market behavior and then evaluate it on overlapping historical data, your results will be biased upward and present an overly optimistic view of likely future performance. Apparent correlations and patterns in historical data may be artifacts of randomness; strategies that exploit those patterns may perform well in backtests over the same period and fail in live trading.

No market feedback. Real orders affect real markets. They consume liquidity, move prices, and trigger reactions from other participants. Backtests fix the historical record and do not model the impact of your hypothetical orders on the market. Strategies that look profitable against a fixed historical tape may behave very differently when their orders actually have to find counterparties.

Slippage. In live markets, limit orders may not fill, and market orders may fill at prices materially different from those quoted at submission. Our backtests model slippage, but every model is imperfect. Strategies designed to capture small mispricings are particularly sensitive to slippage assumptions and may degrade substantially in live conditions.

Data quality and cleaning. Historical market data - including the data we license from third-party vendors and process in-house - may contain errors, gaps, late corrections, busted trades, and other artifacts. We work to clean and validate the data we provide, but no historical dataset is perfect. A strategy may react to a data anomaly in a backtest in a way that differs from how it would react to similar anomalies in live data, and a strategy that appears robust against cleaned data may prove fragile against the messier reality of live markets.

Environmental change. Markets evolve. Products are listed and delisted. Exchanges change rules. Tick sizes and contract specifications shift. Macroeconomic regimes turn over. Other participants enter and exit. A strategy that performed well in one market environment may perform poorly in another, and historical data - even clean, complete historical data - does not capture the future.

Transaction costs. Backtests apply assumed cost models for commissions, exchange fees, and other transaction costs. Your actual costs will depend on your broker, your trading volume, your account type, and other factors that the Platform does not know. Real costs may be higher (or lower) than modeled, and the gap can change a strategy's profile from profitable to unprofitable.

Capacity. Large orders move prices and may not fill in any reasonable time frame. The Platform's backtests do not adjust available liquidity in response to your hypothetical order size. A strategy that looks profitable at small size may degrade or fail entirely at the size you actually want to trade.

Communication and execution failures. Live trading depends on continuous, low-latency communication between your systems, your broker, and the exchange. Backtests assume your strategy responds instantly and consistently to every market event. In practice, network failures, exchange delays, broker outages, and software bugs all cause divergence from the idealized backtest environment.

Manual intervention. Backtests run a fixed strategy. If you intervene manually in live trading - adjusting orders, overriding signals, pausing the strategy - your live results will diverge from the backtest in ways the Platform cannot model.

Black swan events. Extreme market events occur with much higher frequency than ordinary statistical models predict. A backtest can only stress-test a strategy against the black swans that happen to be in the historical sample. Future black swans may be larger, more frequent, or different in kind, and a strategy that survived past tail events may not survive future ones.

Asynchronous fills in multi-leg strategies. Strategies involving multiple instruments (futures spreads, calendar spreads, basis trades, hedged positions) assume coordinated execution across legs. In live markets, you may be filled on some legs and not others, leaving you with unintended directional exposure. Backtests cannot fully replicate the frequency or severity of leg-fill failures.

3. The Strategy Assistant (AI-Generated Code)

The Platform includes a natural-language strategy assistant that converts user prompts into editable strategy code. This feature is provided to accelerate research and is not a substitute for human review.

The assistant can be wrong. Like any large language model, the assistant may misinterpret your prompt, hallucinate functions or parameters, produce code that compiles and runs but does not implement what you intended, or generate logic that contains subtle errors, off-by-one mistakes, lookahead bias, or misunderstandings of how a particular indicator or order type behaves. Some of these errors will be obvious. Others will produce backtests that look superficially reasonable but encode logic the user did not intend.

You are responsible for reviewing all assistant-generated code. Before running, optimizing, sharing, or trading any strategy that includes assistant-generated code - in whole or in part - you must read, understand, and verify that code. If you do not understand what the code does, you should not use it. If you cannot verify that the code does what you intended, you should not use it. The Platform allows you to edit assistant output precisely so that you can take ownership of the final strategy.

Use of the assistant is at your own risk. StratSmith makes no warranty that assistant-generated code will be correct, complete, free of bugs, or fit for any particular purpose. Backtest results based on assistant-generated code are subject to all the limitations of hypothetical performance described in Section 2, and additionally subject to the risk that the underlying code does not faithfully implement the strategy the user described.

4. User-Generated Strategies and Code

Strategies on the Platform are created by users. You are responsible for the strategies you build, the code you write or accept from the assistant, the parameters you choose, the data you select, the optimizations you run, and the conclusions you draw. StratSmith does not review, evaluate, endorse, recommend, or vouch for any user-created strategy.

Logic errors, parameter mistakes, incorrect handling of corporate actions or contract rolls, lookahead bias, survivorship bias, and a long list of other defects can render a backtest meaningless or actively misleading. These risks belong to the user.

5. General Market Risks

5.1 Futures Trading

Futures trading is highly leveraged and involves a substantial risk of loss. Losses can exceed your initial margin deposit. Futures contracts expire. Margin requirements are set by exchanges and brokers and can change with little notice. Adverse moves can trigger margin calls requiring additional capital on short notice; failure to meet a margin call can result in forced liquidation at unfavorable prices. Futures markets can experience limit moves, trading halts, and periods of severely reduced liquidity, during which positions may be impossible to exit at any reasonable price.

Futures trading is not appropriate for everyone. You should not trade futures with capital you cannot afford to lose, with borrowed funds, with retirement savings, or with funds needed for living expenses. If you have any doubt about whether futures trading is appropriate for you, consult an independent, qualified financial advisor before trading.

5.2 Other Asset Classes

The Platform may, from time to time, support research on additional asset classes including cryptocurrency and equities. Each asset class carries its own risk profile. Cryptocurrency markets are subject to extreme volatility, fragmented liquidity, evolving regulation, and operational risks specific to digital assets and the venues that trade them. Equity markets are subject to issuer-specific risks, corporate actions, regulatory changes, and other factors that can rapidly change the value of a position. We will update this Disclosure as we add support for additional asset classes, but you should not assume that the risks described here are exhaustive for any asset class beyond futures.

5.3 General Economic and Market Conditions

All markets are affected by broad economic and political conditions: inflation, interest rates, currency moves, geopolitical events, regulatory shifts, and a wide range of other factors outside any individual participant's control. These conditions can render previously profitable strategies unprofitable, and the historical periods represented in the Platform's data may not be representative of future regimes.

5.4 Past Performance

Past performance - whether actual or backtested - is not a reliable indicator of future results. No representation is made that any strategy will or is likely to achieve profits or losses similar to those displayed by the Platform.

6. Platform, Information, and Service Risks

6.1 Provided "As Is"

The Platform, all data and analyses presented through it, and all features and services associated with it are provided on an "as is" and "as available" basis. To the fullest extent permitted by law, StratSmith disclaims all warranties - express or implied - including warranties of merchantability, fitness for a particular purpose, accuracy, timeliness, completeness, and non-infringement.

6.2 Errors and Omissions

The Platform may contain inaccuracies, bugs, typographical errors, or other defects. Backtest results, optimization outputs, and validation analyses depend on the correctness of the Platform's code, the integrity of the underlying data, and the accuracy of the user's strategy logic - any of which may be flawed. We work to identify and correct errors but do not guarantee that the Platform is or will be error-free.

6.3 Data Vendors

The historical market data made available through the Platform is sourced from third-party vendors and processed in house. Data may be incomplete, delayed, or contain errors that originate with the vendor and that we did not catch. Vendor outages, format changes, and licensing disputes can all affect the availability and quality of data on the Platform.

6.4 Availability

We do not guarantee uninterrupted access to the Platform. The Platform may become unavailable due to maintenance, software updates, infrastructure failures, denial-of-service attacks, vendor issues, or causes outside our reasonable control. We are not liable for losses, missed opportunities, or other damages resulting from Platform unavailability.

6.5 Security

No system is perfectly secure. Despite reasonable measures, the Platform may be subject to attempted intrusions, data breaches, or other security incidents that could affect the confidentiality, integrity, or availability of user data, strategies, or other information. Use of the Platform involves accepting this residual risk.

7. Investment Advice and Regulatory Posture

StratSmith does not provide investment advice. Nothing on the Platform constitutes a recommendation to buy, sell, or hold any security, futures contract, derivative, or other financial instrument. Educational content, default parameters in template strategies, sample code, illustrative backtests, and similar materials are provided for informational purposes only and are not personalized to your circumstances.

StratSmith is not a registered broker-dealer, investment adviser, commodity trading advisor, commodity pool operator, futures commission merchant, or introducing broker. We do not hold any of the licenses or registrations associated with those roles, and the protections that accompany those roles do not apply to your use of the Platform.

You should consult independent, qualified professionals - financial advisors, tax advisors, attorneys, and others as appropriate - before making any trading or investment decision based on research conducted on the Platform.

8. Community Features and Shared Strategies

The Platform includes community features that may include team-based strategy sharing, publicly shareable backtest result links, and an associated Discord server for users.

Strategies and content shared by users are not reviewed, endorsed, or vetted by StratSmith. When you view a strategy, backtest, or other content created by another user - whether shared within a team, accessed through a public share link, or posted in the Discord - you are viewing the work of another user, not the work of StratSmith. The risks described throughout this Disclosure apply with full force to any strategy or backtest you obtain from another user, and you should not assume that another user's strategy is well-designed, profitable, free of bugs, or appropriate for your circumstances.

Public share links display hypothetical, backtested performance and include a notice to that effect. That notice does not change your obligation to evaluate the underlying strategy on its merits before using or relying on it.

StratSmith disclaims responsibility for the content, accuracy, suitability, or performance of any user-created or user-shared strategy, backtest, comment, message, or other community-generated material.

9. Live Trading (Forward-Looking)

StratSmith does not currently offer live trade execution. The Platform is a research and analysis tool. Strategies built on the Platform are not connected to any brokerage account, do not place orders in any market, and do not result in real positions or real P&L through any feature of the Platform itself.

If we offer live trading functionality in the future - whether through direct broker integrations, simulated trading environments operated by third parties, prop-firm partnerships, or other means - additional risks will apply. Those risks will include, without limitation:

We will provide additional disclosure specific to any live trading functionality at the time it is offered. You should not assume that any feature on the roadmap will be offered, that it will be offered on any particular timeline, or that it will be available in your jurisdiction. This Section 9 is intended to put users on notice that live trading involves substantial risks beyond those associated with research and backtesting, and is not a representation that StratSmith will offer live trading.

10. Tax Considerations

Trading produces tax consequences that depend on your jurisdiction, account structure, holding period, and many other factors specific to your situation. The Platform does not model your tax position, and backtest results are pre-tax. Real after-tax returns may differ materially from backtested results. Consult a qualified tax advisor.

11. Limitation of Liability

This Disclosure should be read together with the Limitation of Liability and related provisions of our Terms of Service, which apply to your use of the Platform. To the fullest extent permitted by law, StratSmith and its officers, employees, contractors, and agents will not be liable for any losses, damages, or other adverse outcomes arising from your use of the Platform, your reliance on any output of the Platform, your use of strategies or code created by yourself, the assistant, or other users, or any of the risks described in this Disclosure.

12. Acceptance, Updates, and Governing Law

By creating an account on the Platform and clicking through the acceptance prompt presented at signup - and by continuing to use the Platform thereafter - you acknowledge that you have read this Disclosure, that you understand the risks it describes, and that you accept those risks.

We may update this Disclosure from time to time. Material updates will be communicated through the Platform or by email. Your continued use of the Platform after an update takes effect constitutes acceptance of the updated Disclosure.

This Disclosure is governed by the laws of the State of Delaware, without regard to its conflict-of-laws principles. Any dispute arising out of or relating to this Disclosure or your use of the Platform will be resolved in accordance with the dispute-resolution provisions of our Terms of Service.

13. Contact

Questions about this Disclosure can be sent to support@stratsmith.io.

StratSmith, LLC
Dover, Delaware