There can be a few scenarios associated with a strategy being in loss and how it may affect the investments that are copying it. Let us take a look at all those scenarios:
- The master strategy is making a loss and the investments copying it are making a loss too. In such a case it is good to bear in mind that strategy provider commission does not need to be paid until the investment’s profits of the subsequent trading periods exceed your loss.
- The master strategy is making a loss but the investment may be in profit due to difference in opening prices of the trades. This is because if you start copying trades after the strategy provider has started trading, the trades will be copied based on current market rates.
- The master strategy could be in loss and ultimately reach an equity of 0 or lower. In such a case, the trades will automatically be closed by stop-out. If the balance is negative after closing all the orders, a null operation is performed to set the balance to 0.
- Investors can manually choose to stop copying after the strategy account trades have been closed by stop-out. Even if this isn’t done, all such investments will be closed automatically within 7 days following the strategy account’s stop-out. If there is any negative balance on the account after the trades are closed, a null operation will be performed to set it to 0.
- Once there is a stop-out, the strategy will not be visible on the Social Trading application anymore.