Regulatory Risk Disclosure & Hypothetical Performance Notice
Statutory disclosures regarding simulated backtesting results, execution slippage modeling, and non-custodial analytical software architecture.
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 ACTUALLY 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.
1. Self-Directed Software Analytics Utility (Non-Fiduciary Status)
EMI is a specialized, non-custodial software application and quantitative research platform. EMI does not manage client funds, hold private keys, accept custodial deposits, or act as an execution broker-dealer. All algorithmic tree structures, backtests, and rotation logic generated or displayed by EMI are solely for research, testing, and self-directed configuration by the individual user.
Nothing published on EMI constitutes personalized investment advice, a recommendation to enter any derivative contract or spot trade, or a solicitation to buy or sell digital assets. You are solely responsible for evaluating your financial position, risk tolerance, and tax obligations before executing any transaction.
2. The 12 bps Friction Hurdle vs. Real-World Execution
EMI’s backtesting engine incorporates an institutional standard 12 basis point (0.12%) hurdle per rotation round-trip. This hurdle covers:
- 5 bps Binance Spot VIP 0 / Retail taker fee (with BNB fee deduction).
- 4 bps estimated bid-ask spread across liquid pairs (BTC, ETH, PAXG, SOL).
- 3 bps modeled execution slippage during high-volatility regime transitions.
While this 12 bps standard exceeds the zero-friction assumptions used by naive retail backtesters, real-world execution conditions may experience higher slippage during black-swan events, exchange API rate-limit delays, or localized order-book illiquidity.
3. Spot Rotation vs. Perpetual Futures Funding Risks
EMI emphasizes spot rotation strategies (e.g. rotating between BTC, PAXG Tokenized Gold, and Stablecoins) specifically to eliminate the liquidation cascades, counterparty exchange insolvency, and 11%–30% annual funding fee bleeds inherent in perpetual futures.
However, spot rotations remain exposed to underlying market volatility, systemic smart contract risks (such as tokenized asset de-pegging), and exchange platform downtime. Holding tokenized physical gold (PAXG) or algorithmic stablecoins entails exposure to the custody and audit reliability of third-party issuers.
4. Out-of-Sample (OOS) Testing Limitations
EMI splits historical market data into an 80% In-Sample training window and an untouched 20% Out-of-Sample validation corridor. While this methodology drastically reduces curve-fitting and lookahead bias, future market dynamics are non-stationary. Structural shifts in global macro liquidity, regulatory actions, or unprecedented technological developments may render historical regime models ineffective.
5. Independent Financial Counsel
If you are in any doubt about the suitability of quantitative trading or digital assets, you should consult an independent, licensed financial advisor, legal professional, and tax accountant in your jurisdiction.