CopyTrader – Reasons for differences in Allocation and Performance
When you Copy a Trader, be aware that there are situations where perfect proportionality (your copied trades match the exact proportionality of the investor you are copying) does not occur.
What may cause a difference in allocation and performance?
1. Manual changes of copied trades
Whenever the copier chooses to close copied trades, a difference in allocation and performance is created.
2. Minimal copied trade size
The CopyTrader system doesn’t support trades lower than $1. The exclusion of small trades may distort allocation and performance.
3. Money in & money out operations
Whenever the investor you are copying either deposits or withdraws funds, the proportional amount of the new copied trades that will be opened will be different.
4. ‘Stop Loss’ changes
Whenever the investor you are copying changes a ‘Stop Loss’ that requires to allocate more money into the open trade, your ‘Stop Loss’ will change accordingly, however the amount invested in the trade won’t change. Therefore you might see differences in profit and loss percentages between the two trades.
5. Copying of all open trades
When choosing to copy all open trades of an investor, there will be small allocation differences if some of the open trades are currently losing. However, choosing not to copy the open trades, will create larger distortions in the proportions of money allocations.
Remember, difference in allocation can be to your disadvantage or to your benefit.