This article describes the allocation method available for copy trading and MAM. This method defines the formula used to calculate position sizes when copying trades from a master account to subscribed investment accounts
The allocation method that is used for Copy Trading and MAM accounts is:
Proportional to Equity x Ratio (default) — applies a risk multiplier to the investor-to-master equity ratio.
A position can't be copied with a size that is beyond the minimum or maximum possible size defined for a particular instrument. If a calculated position size is beyond the valid range, the position is copied to an investment account with the minimum or maximum possible size respectively.
Example:
Proportional to Equity x Ratio
Investor’s position size = Master trader’s position size x (Investor's equity / Master trader’s equity) x Ratio
Example
Ratio = 0.5
The master trader's equity= $2,000
The investor's equity = $5,000
The master trader opens a position of 2.50 lots. The investor copies that position as 2.50 x (5000/2000) x 0.5 = 3.13 lots