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How can I evaluate a broker's track record?
If you plan to participate in a commodity pool, information on past performance must be included in the risk disclosure document, which is required to be provided to you by the Commodity Pool Operator.
Bear in mind that past performance is not a predictor of future results.
If you authorize a Commodity Trading Advisor to direct trading in your individual account, the Commodity Trading Advisor must provide you with a disclosure document including information on past performance.
In reading the disclosure document, note whether the performance results are based on actual trading results of client accounts.
The Commodity Trading Advisor must disclose whether information is based on the Advisor's own proprietary (personal) account, or based on hypothetical or simulated results.
If the information is based on hypothetical or simulated results, the Commodity Trading Advisor must disclose the inherent limitations of these results.
No representation may be made that any account will or is likely to achieve profits or losses similar to those shown.
If you plan to open an individual account, and plan to ask your Futures Commission Merchant, Introducing Broker, or one of their Associated Persons for advice or have the firm or Associated Person trade on your behalf, get as much information as possible about the firm's or the Associated Person's track record on behalf of other clients.
While the firm or associated person is not required to provide this information, be wary of any firm or associated person who is not forthcoming or who provides you with incomplete information.
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