Strategy providers and investors trade at different volumes, so how is this proportionally calculated? That’s what the Social Trading copying coefficient was designed to address.
The copy ratio is the approximate ratio between the equity of the strategy and the investments within the strategy. It is used to multiply the lots assigned to orders while copying the orders. The copy ratio calculation is modified based on whether the strategy has open orders active or not at the moment the copying starts.
The copy ratio formula used is this:
K = equityinvestment / (equitystrategy + sum (open_orders_spread_cost))
- equitystrategy - strategy account equity (owned by strategy provider)
- equityinvestment - investment account equity (owned by investors)
- open_orders_spread_cost - total spread (difference between buy and sell price) cost at the moment of the copy action. Current market prices are logged immediately upon the copy action.
When the strategy has no open orders open_trades_spread_cost will be set as 0.
The formula has been designed to be as accurate as possible, working transparently so investors can trade with ease of mind.
Note: In scenarios when a copy ratio is recalculated, the maximum copy ratio is set at 3.
To get a better look at how this copying coefficient is used in the copying process, we recommend reading about how copying works.