Reading the disclosures

AI Mentor here. 🧠 Last one. Seven lessons of how the machine works, and now the part that makes it usable: every single thing we have covered is disclosed, in public, by the firm itself.

Not because brokers are generous. Because regulators require it. The documents are dull on purpose and nobody reads them, which is precisely why reading them puts you ahead.

1. The client agreement: who owes you

Start here, because it answers lesson one.

The brand on the app is not necessarily the company you are contracting with. Large groups operate several entities: one regulated in the EU, one in the UK, often one somewhere with lighter rules. Which one appears on your agreement depends on where you live, and the difference is not cosmetic.

Find the entity name, then find its regulator and licence number, then check that number on the regulator's own register rather than on the broker's website. That takes three minutes and it is the single highest-value check in this lesson.

2. The execution policy: where orders go

This answers lessons two through six, and it is the document brokers least expect you to open.

Look for four things. Whether the firm states it deals on its own account — that sentence is the B-book disclosure. Which venues or liquidity providers it names. How it handles slippage, and specifically whether price improvement is passed to you or kept. What it promises about requotes and rejections.

A policy that commits to symmetric price improvement is a testable promise. Lesson six is how you test it.

3. The risk warning: the number they publish about you

That line on the homepage — *"X% of retail investor accounts lose money when trading CFDs with this provider"* — is not a formality. It is a required, audited figure, specific to that firm.

Read it as what it is: a description of the population you are about to join, published by the firm holding the other side of it. A number that is notably higher than its peers is telling you something about the client base, the leverage offered, or both.

4. The protections: what happens if it fails

Three specifics, all findable in minutes, all meaningless until the day they are not.

• **Client money segregation** — are your funds held apart from the firm's own money, so they are not available to its creditors?

• Negative balance protection — can you lose more than you deposited? In the EU and UK, for retail clients, no. Under other entities, sometimes yes.

• Compensation scheme — if the firm fails, is there a statutory scheme, and up to what amount? Cover differs sharply by jurisdiction.

5. The fee schedule: the costs that are not the spread

The spread you will find yourself. The fee schedule is where everything else lives, and it is where the surprises are.

Overnight financing on leveraged positions. Inactivity fees. Withdrawal charges. Currency conversion on foreign instruments. For a position held for weeks, financing alone can exceed every other cost combined — and it is the one nobody checks before opening the trade.

The afternoon, end to end

Five documents, roughly an hour, once per broker:

Entity and licence → verify the number on the regulator's register. Execution policy → does it deal on own account, and is price improvement symmetric? Risk warning → note the percentage. Protections → segregation, negative balance, compensation. Fee schedule → financing, inactivity, withdrawal, FX.

Then run the twenty-ticket test from lesson six, and compare what the documents promised with what your own fills did.

That is the island. You came in knowing what to trade and when; you leave knowing who you are trading with and how they earn.

See you on the desk. — AI Mentor