Allocation methods and their effect on open positions

Learn how allocation methods set initial position sizes and when proportional closures adjust them

This article explains how allocation methods are applied when positions are copied from a master account to investment accounts and how they affect the size of open positions. For a full list of supported allocation methods and their details, refer to Allocation methods for copy trading and MAM.

Key principle

Allocation methods are applied only at the moment when a position is copied from a master account and opened on an investment account. Once opened, the position size is fixed and isn't recalculated based on the selected allocation method.

This means that even if the balance or equity ratio between the master account and investment account changes after the position is opened (for example, due to other trades, deposits, or withdrawals), the size of that position remains unchanged and won't be automatically adjusted to new proportions. This principle always applies, except for the single case during partial position closures, when the initial proportion between master and investment positions is maintained (for details, refer to the Mechanism for proportional position closure).

Key takeaways for practical application

• Allocation methods apply only at position opening: the selected method determines the initial position size but doesn't affect positions that are already open.

• Balance of equity changes don't affect open positions: balance or equity fluctuations after copying don't trigger automatic adjustments of position sizes.

• Proportionality is maintained under certain conditions: the system maintains the initial master-to-investor position ratio only when significant changes occur on the master account (for details, refer to the Mechanism for proportional position closure).

• Investors can manage positions independently: after copying, investors may adjust their positions without affecting the system’s operation.

Understanding these principles is essential for master traders planning position strategies and for investors managing risk and capital in copy trading.

Mechanism for proportional position closure

The following describes an exception to the key principle of position size immutability, which normally applies when positions are copied from a master account to subscribed investment accounts. In this special case, during partial position closures, the system automatically maintains the initial proportion between master and investor positions.

Example

This example illustrates how the proportional position closure mechanism works.

Step 1: Investor copies a position from the master account.

• The master trader opens a position of 1 lot.

• Suppose that the investor copies it as 2 lots according the selected allocation method.

The initial proportion is 2:1.

Step 2: Investor independently partially closes the position.

• Th investor reduces the position from 2 lots to 1.6 lots.

• The master trader's position remains unchanged, 1 lot.

Steps 3 and 4: Master trader partially closes small volumes.

• The master trader closes 1 to 0.9 lot.

  The investor’s position remains unchanged, 1.6 lots.

• The master trader closes 0.9 to 0.8 lot.

  The investor’s position remains unchanged, 1.6 lots.

Step 5: Proportional closure is triggered.

• The master trader closes 0.8 → 0.7 lot.

• The investor’s position automatically reduces from 1.6 to 1.4 lots.

The initial proportion 2:1 is restored (1.4 / 0.7 = 2).