Forum on trading, automated trading systems and testing trading strategies
How to Start with Metatrader 5
Sergey Golubev, 2017.02.02 07:45
The question of how exactly the Subscriber's deposit will participate
in trading via Signals service is one of the most critical ones. When
solving this issue, we followed the already mentioned principle -
providing maximum protection for each participant. As a result, we can
offer a secure solution for Subscribers.
When enabling signals in the terminal and subscribing to one of them,
Subscribers should select what part of the deposit is to be used when
following the signals. There was an alternative solution of setting the
ratio between Subscriber's and Provider's position volumes. But such a
system could not guarantee the security of the Subscriber's deposit. For
example, suppose that Provider's deposit is 30 000$, while Subscriber's
one is 10 000$ and the ratio of 1:1 has been selected. In that case,
the Signals Provider may just wait out temporary drawdown having a large
volume order, while the Subscriber may lose all the funds with all his
or her positions closed by Stop Out. The situation may get even worse if
the Provider's balance suddenly changes (top up or withdraw), while
previously specified volumes ratio remains intact.
To avoid such cases, we have decided to implement the system of
percentage-based allocation of the part of a deposit, which is to be
used in trading via the Signals service. This system is quite
complicated as it considers deposit currencies, their conversion and
Let's consider a specific example of using the volumes management system:
Calculation of Provider's and Subscriber's position volumes ratio:
Thus under the given conditions, Provider's deal with volume of 1 lot will be copied:
- to Subscriber2 account in amount of 7% - volume of 0.07 lots
Be careful not to confuse the percentage value of the used part of the
deposit and the actual ratio of position volumes. The trading terminal
allows setting the part of the deposit in percentage value. This value
is used to calculate the ratio of position volumes. This data is always
fixed in the log and is shown in the following way:
You should always know that by increasing lot size, you increase DD and risk as well.
Each signal provider has its own trading plan in mind with a specific DD and risk to reward ratio.
If you alter that you put your account in danger.