Backster — Important Risk Disclosure

Last Updated: 31 May 2026

Please Read This Before Using Backster

This document describes the most important risks associated with using Backster and engaging in cryptocurrency trading based on strategies you generate or analyze with our Service. Please read this disclosure carefully. By using Backster, you confirm that you have read, understood, and accepted these risks.

This Risk Disclosure is not a substitute for our full Terms of Service or Privacy Policy. It highlights specific risks that we believe deserve your direct attention before you use Backster or act on its outputs.

1. What Backster Is — And What It Is Not

What Backster IS

Backster is a cryptocurrency trading strategy analysis tool. It helps you:

• Describe a trading strategy in plain language
• Generate a structured strategy specification using AI
• Backtest the strategy against historical market data
• Refine and analyze strategies before deciding whether to use them

What Backster IS NOT

Backster is NOT a cryptocurrency exchange. We do not let you buy, sell, or trade cryptocurrency.

Backster does NOT execute trades on your behalf. Any actual trading happens elsewhere, using your own accounts on third-party platforms, at your own choice.

Backster does NOT hold or transmit your cryptocurrency or fiat money. We never have access to your funds, wallets, or private keys.

Backster is NOT a licensed investment advisor, financial advisor, securities broker, or financial planner. We are not registered with the Securities Commission Malaysia, the U.S. Securities and Exchange Commission, the Financial Conduct Authority (UK), or any equivalent regulator.

Backster does NOT provide personalized financial advice. Nothing we say, generate, or display takes into account your individual financial situation, goals, risk tolerance, tax position, or other personal circumstances.

Backster does NOT guarantee that any strategy will be profitable. No one can guarantee profitable trading. We do not, and we do not believe anyone honestly can. Backster is a non-discretionary tool: the software does not make decisions for you. It translates your ideas into code. The AI does not possess “market intuition” and does not “pick winners” — it is a simulator for mathematical logic that you provide.

2. Cryptocurrency Trading Is High Risk

Cryptocurrency trading is among the riskiest forms of investment available to retail participants. Before you trade, you should understand and accept the following:

2.1 You Can Lose Everything

You may lose some or all of the money you commit to cryptocurrency trading. Cryptocurrency prices can drop to zero. Entire projects, exchanges, and tokens have collapsed, leaving holders with nothing.

You should only trade with money you can afford to lose completely. This means money whose loss would not significantly affect your ability to pay your rent, feed your family, meet your other financial obligations, or pursue your other life goals.

If you cannot afford to lose your trading capital, you should not trade cryptocurrency.

2.2 Cryptocurrency Markets Are Extremely Volatile

Cryptocurrency prices can move dramatically within seconds. A position that looks profitable one moment can become catastrophically loss-making moments later. Volatility events can occur due to:

• Macroeconomic news (interest rates, regulatory announcements, geopolitical events)
• Cryptocurrency-specific events (hacks, exchange failures, protocol changes, regulatory action)
• Social media activity (one tweet, one news article, one influential post)
• Liquidations cascading across leveraged positions
• Coordinated buying or selling by large holders (“whales”)
• Apparent or actual market manipulation

A strategy that performs well during periods of low volatility may fail dramatically during volatility spikes. A strategy that performs well during a bull market may fail during a bear market, and vice versa.

2.3 Markets Operate 24/7 With No Circuit Breakers

Unlike traditional stock markets, cryptocurrency markets never close. There are no trading halts, no circuit breakers, no opening and closing auctions, and no market makers of last resort. A flash crash at 3 AM your local time will execute against your strategy whether you are awake or not.

2.4 Liquidity Risk

Some cryptocurrencies and trading pairs have low liquidity, meaning that you may not be able to enter or exit positions at the prices you expect. Slippage — the difference between expected and executed prices — can be significant and can erode or reverse strategy performance.

2.5 Exchange Risk

The exchanges where you actually trade are themselves significant sources of risk:

• Exchanges can be hacked, lose funds, or freeze withdrawals
• Exchanges can experience technical outages during the worst possible moments
• Exchanges can go bankrupt with insufficient reserves to make customers whole
• Exchanges can be sanctioned, restricted, or shut down by regulators
• Exchange terms of service can change unilaterally, affecting your access

Backster does not endorse any specific exchange and has no control over what happens on the exchanges you choose to use.

Execution software risk: If you export strategies to Freqtrade or other third-party trading software, you acknowledge that those platforms are independent of Backster. Bugs, misconfigurations, “fat-finger” errors, or API failures within your execution environment are not the responsibility of Backster. We provide the blueprint; you are responsible for the construction, operation, and maintenance of the trading bot.

2.6 Regulatory Risk

Cryptocurrency regulation continues to evolve rapidly in Malaysia and worldwide. Future regulatory actions could:

• Restrict your ability to trade certain assets
• Subject your gains to new or higher taxes
• Require additional reporting or disclosure obligations
• Make certain trading strategies illegal in your jurisdiction
• Render previously profitable strategies unprofitable

You are responsible for understanding and complying with the laws applicable to you, including tax laws.

2.7 Custody and Security Risk

If you store cryptocurrency yourself (“self-custody”), you bear the full risk of:

• Losing your private keys (no one can recover them)
• Falling victim to phishing, malware, or social engineering attacks
• Sending funds to the wrong address (transactions are irreversible)
• Losing access to your wallet through device failure, fire, theft, or death

If you store cryptocurrency on an exchange, you bear the risk of exchange failure as described above.

3. Specific Risks of AI-Generated Strategies

Backster uses artificial intelligence to help generate trading strategies. AI introduces its own category of risks beyond those of cryptocurrency trading itself.

3.1 AI Output Is Probabilistic, Not Authoritative

The AI models that power Backster generate outputs based on patterns in training data. They are not financial experts, market analysts, or trading professionals. They produce plausible-sounding responses that may or may not be correct, useful, or safe to act on.

An AI-generated strategy may:

• Contain logical errors that the AI fails to recognize
• Apply technical indicators incorrectly or use them in inappropriate combinations
• Miss important factors that an experienced trader would consider
• Generate confident-sounding rationales for strategies that have no statistical edge
• Optimize for backtest performance in ways that won’t generalize to live markets

Input sensitivity (“garbage in, garbage out”): AI outputs are highly sensitive to the quality of your instructions. Vague, contradictory, or logically impossible prompts will produce flawed strategies, and the Service cannot “fix” a fundamentally unsound trading theory that you provide.

3.2 Overfitting and Curve-Fitting

Backtested strategies often look impressive on historical data but fail in live trading. This happens because:

• Overfitting: The strategy is optimized to capture noise in the historical period rather than genuine market patterns
• Curve-fitting: Parameters are tuned to make the backtest look good rather than to identify robust market behaviors
• Survivorship bias: Historical data may not include assets that failed entirely
• Look-ahead bias: Subtle errors in backtest design can give the strategy “knowledge” it could not have had in real time
• Market regime change: Past market conditions may not repeat in the future

A strategy that produces a 200% backtest return may produce a 50% real-money loss in the same market conditions tomorrow. This is not uncommon. It is, in many cases, the rule rather than the exception for naïvely generated strategies.

3.3 The Map Is Not the Territory

Backtests use historical price data. Real trading involves many factors that backtests do not capture:

• Slippage during volatile periods
• Order book depth and your impact on it
• Exchange downtime exactly when you need to exit
• Bid-ask spreads, especially in less liquid pairs
• Trading fees, withdrawal fees, network fees, and tax obligations
• Latency between your decision and execution
• Emotional factors that affect your actual behavior versus the strategy’s idealized behavior

Backster’s backtests aim to be as realistic as possible but cannot perfectly simulate live trading conditions.

3.4 AI Can Generate Plausible-Sounding Nonsense

Modern AI models can produce confident, articulate responses that are factually wrong. This is known as “hallucination.” For trading strategies, this can take subtle and dangerous forms:

• Citing technical indicators that don’t exist or work differently than described
• Misstating mathematical relationships
• Providing rationales that sound expert but are subtly incoherent
• Recommending parameter values without sound basis

You should treat every AI output as a starting point for your own analysis, not as a finished recommendation. Independent verification is your responsibility.

Independent validation requirement: You are strictly required to perform a code review and a dry run (paper trade) of any AI-generated strategy before using it. Deploying AI-generated logic in a live market without manually verifying the underlying Python/JSON code is an inherently negligent act for which you assume full responsibility.

3.5 Limitations of AI Knowledge

The AI models we use have training data cutoffs. They may not be aware of:

• Recent market events, crashes, or rallies
• New cryptocurrencies, protocols, or exchange features
• Recent regulatory developments
• Current market sentiment or macro conditions
• Anything that happened after the model’s training cutoff

The AI may generate strategies that worked well in a market environment that no longer exists.

4. Risks of Backtested Results

Backster lets you backtest strategies against historical data. Backtest results are powerful tools for thinking about strategy behavior, but they carry specific risks of misinterpretation.

4.1 Past Performance Does Not Predict Future Results

This is the single most important sentence in any trading-related document. A strategy’s historical performance, no matter how impressive, tells you very little about its future performance. Markets change. Conditions that produced past returns may not return. The same strategy that earned 100% last year may lose 80% this year.

You should never make trading decisions based primarily on backtest performance.

4.2 Backtest Conditions Are Idealized

Backster’s backtests assume:

• You can execute every trade at the historical price shown
• The exchange is always available
• Your orders fill instantly with no slippage
• Fees are constant and predictable
• You execute the strategy mechanically without emotion

None of these assumptions hold perfectly in live trading. The gap between backtest performance and real-world performance can be enormous.

4.3 Selection Bias in Successful Strategies

If you generate 100 strategies and run backtests, some will look amazing purely by chance. Selecting the “winners” and assuming they have a real edge is a classic mistake. The strategies that look best in retrospect often look that way because they were lucky on the test data, not because they have predictive power.

4.4 Beware of “Magic” Strategies

If a strategy backtest shows:

• Very high returns with very low drawdowns
• Returns that compound smoothly across all market conditions
• Performance that seems too good to be true

It is almost certainly overfitted or contains a bug. Real strategies have rough periods, drawdowns, and uncertainty. Strategies that don’t either don’t work, or you’re seeing a bug in the backtest, or you’re seeing pure luck.

5. What Backster Will Not Tell You

To set clear expectations:

• We will not tell you when to enter or exit specific trades
• We will not tell you which cryptocurrencies are likely to go up or down
• We will not tell you whether you should be in the market or out of it
• We will not tell you how much of your capital to risk
• We will not tell you whether cryptocurrency is right for your financial situation
• We will not call you to congratulate you on a winning trade or warn you about a losing position
• We will not be aware of your overall financial situation, tax position, or life goals

These are deliberate choices. We are not licensed to provide this kind of advice, and we are not equipped to do so well.

If you want personalized financial advice, please consult a qualified, licensed financial advisor in your jurisdiction.

6. What You Should Do Before Trading

If you decide to use any strategy generated, refined, or analyzed with Backster for real trading, we strongly recommend that you:

• Educate yourself thoroughly about cryptocurrency markets, trading mechanics, and the specific risks of leveraged trading if applicable. There are no shortcuts.
• Paper trade first. Run the strategy with simulated money for an extended period (months, not days) before committing real capital. Real-time paper trading is far more informative than historical backtesting.
• Start very small. When you do commit real capital, start with an amount whose loss would be inconvenient but not painful. Scale only after you have demonstrated real-money performance over a meaningful time period.
• Diversify. Never put all your capital into a single strategy, a single asset, or a single exchange.
• Understand your strategy. If you cannot explain in your own words why your strategy should work, you do not understand it well enough to trade it with real money.
• Plan your exits. Decide in advance what loss you will tolerate before stopping. Document this plan and stick to it.
• Keep records. Track every trade. Review your results. Understand what works and what doesn’t.
• Consult professionals. Speak with a licensed financial advisor about whether trading aligns with your overall financial plan. Consult a tax professional about your reporting obligations.
• Be honest with yourself. Are you trading because you have an edge, or because you want to feel a certain way? The market is the most expensive place to learn this lesson.

7. Warnings

We are required by good practice — and by simple decency — to call out the following:

Trading Is Not a Get-Rich-Quick Scheme

Despite popular narratives, the overwhelming majority of retail cryptocurrency traders lose money over time. Trading is not a path to easy wealth. Sustainable trading profits, when they exist, come from years of disciplined practice, careful risk management, and a meaningful edge — not from AI-generated strategies you found in an app.

Beware of Survivorship Bias in Trading Stories

You see traders bragging about their winning trades on social media. You do not see the much larger number of traders who quietly lost their savings. The visible “success” stories represent a small minority of participants, not a typical outcome.

Do Not Trade Borrowed Money

Never trade with money you have borrowed, money from credit cards, money for rent, money for food, money for medical care, or money your family depends on. We say this not because it’s a legal requirement, but because we have a moral responsibility to be direct with you.

Watch for Signs of Problem Trading

If you find yourself:

• Increasing your trading sizes to “make back” losses
• Trading more frequently than your strategy requires
• Hiding your trading activity from your family
• Borrowing money to trade
• Trading with money you cannot afford to lose
• Feeling unable to stop checking the market
• Experiencing significant anxiety, depression, or other distress related to trading

You may be exhibiting signs of problem trading or trading addiction. These are serious conditions that can damage your finances, your relationships, and your mental health. Please seek help. In Malaysia, you can contact the Befrienders Kuala Lumpur (+603-7956 8145) or your healthcare provider. If you are experiencing financial distress due to trading losses in Malaysia, you can also contact AKPK (Agensi Kaunseling dan Pengurusan Kredit) at 03-2616 7766 for free credit counselling and debt management support. Other countries have similar resources.

8. Acknowledgment

By using Backster, you acknowledge that:

• You have read this Risk Disclosure
• You understand the risks of cryptocurrency trading
• You understand the limitations of AI-generated strategies and backtested results
• You understand that Backster is not a financial advisor and does not provide personalized investment advice
• You take full responsibility for your trading decisions and their consequences
• You will not hold Backster responsible for any losses you incur from trading

If you do not agree with any of the above, please do not use the Service.

Contact Us

If you have questions about this Risk Disclosure or about how Backster works, please contact us at support@backster.app.

If you have concerns about your trading behavior or financial wellbeing, please consult a qualified professional. We care about our users as people, not just as customers.