Hypothetical performance limitations, in plain language

Almost every trading system is sold with a backtest. Almost none of the sellers explain what a backtest cannot tell you. This page exists so that SI-Trader's own numbers — wherever you see them — are read the way regulators intend: as simulated history, never as a promise.

The required disclosure

Under CFTC Rule 4.41, hypothetical performance must be accompanied by this disclosure. It appears in SI-Trader's guide and wherever simulated results are referenced:

Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

What that means, line by line

"Do not represent actual trading." No money was at risk. Nobody hesitated, nobody's broker rejected an order, nobody's internet dropped mid-trade. Real trading has all of that.
"Trades have not been executed." A backtest assumes fills at prices the simulation chooses. Live markets add slippage, partial fills, and spread — costs that compound quietly and can turn a marginal system negative.
"Under- or over-compensated for market factors such as lack of liquidity." Simulations struggle to model what happens when the market is thin, fast, or gapping — exactly the moments that produce the biggest real losses.
"Designed with the benefit of hindsight." Every rule in a backtested system was written by someone who had already seen the data it is tested on. Even honest developers cannot fully un-know the future their system was tuned against. This is the deepest limitation, and no disclaimer formatting makes it smaller.
"No representation… profits or losses similar to those shown." The legal sentence that matters most: a beautiful equity curve is not evidence about your account.

Questions to ask any vendor (including us)

Which instrument, which period, which exact settings produced this result — and are those the settings the product ships with?
Are commissions and realistic slippage included?
Is the result a live trading record, or hypothetical? If anyone blurs that line, walk away.
What was the worst drawdown, and what happened in the worst month — not just the headline number?

SI-Trader's position: our materials label simulated results as hypothetical wherever they appear, state the instrument and period they came from, and never present a backtest figure as verified live performance. The system's value case rests on its structure — 50 edges scored live, hard risk caps, no forced trades — not on a curve. Start any system, ours included, in simulation, with your own settings, on your own data. That test is worth more than any vendor's chart.