# Allocation methods for copy trading and MAM

This article describes the allocation methods available for copy trading and MAM. These methods define the formulas used to calculate position sizes when copying trades from a master account to subscribed investment accounts. For details on how allocation methods work, refer to [Allocation methods and their effect on open positions](https://docs.b2copy.b2broker.com/copy-trading-pamm-and-mam-concepts/allocation-methods-and-their-effect-on-open-positions).

One of the following allocation methods can be selected when [creating a copy-trading or MAM subscription](https://docs.b2copy.b2broker.com/admin-guide/manage-subscriptions/create-a-copy-trading-or-mam-subscription) in the Back Office:

* [Proportional to Balance](#proportional-to-balance) — copies positions based on the ratio of the investor's account balance to the master account balance.
* [Proportional to Equity](#proportional-to-equity) — copies positions according to the ratio of the investor's equity to the master account equity.
* [Proportional to Balance x Ratio](#proportional-to-balance-x-ratio) — applies a risk multiplier to the investor-to-master balance ratio.
* [Proportional to Equity x Ratio](#proportional-to-equity-x-ratio-default) (default) — applies a risk multiplier to the investor-to-master equity ratio.
* [Fix Lot Allocation](#fixed-lot-allocation) — copies all positions with the same predefined size.
* [Ratio Multiplier](#ratio-multiplier-also-called-the-lot-allocation-method) (also called the Lot Allocation method) — multiplies the master position size by a set ratio to determine the investor’s position size.

{% hint style="info" %}
A position can't be copied with a size that is beyond the minimum or maximum possible size defined for a particular instrument. If a calculated position size is beyond the valid range, the position is copied to an investment account with the minimum or maximum possible size respectively.
{% endhint %}

## ‍**Proportional to Balance**

`Investor’s position size = Master trader’s position size x (Investor's balance / Master trader’s balance)`

**Example**

The master trader's balance = $8,000

The investor's balance = $2,000

The master trader opens a position of 2.00 lots. The investor copies that position as 2.00 x (2000/8000) = 0.50 lots

## **Proportional to Equity**

`Investor’s position size = Master trader’s position size x (Investor's equity / Master trader’s equity)`

**Example**

The master trader's equity= $2,000

The investor's equity = $5,000

The master trader opens a position of 2.50 lots. The investor copies that position as 2.50 x (5000/2000) = 6.25 lots

## **Proportional to Balance x Ratio**

`Investor’s position size = Master trader’s position size x (Investor's balance / Master trader’s balance) x Ratio`

**Example**

Ratio = 2.5

The master trader's balance = $8,000

The investor's balance = $2,000

The master trader opens a position of 2.00 lots. The investor copies that position as 2.00 x (2000/8000) x 2.5 = 1.25 lots

## ‍**Proportional to Equity x Ratio (default)**

`‍Investor’s position size = Master trader’s position size x (Investor's equity / Master trader’s equity) x Ratio`

**‍Example**

Ratio = 0.5

The master trader's equity= $2,000

The investor's equity = $5,000

The master trader opens a position of 2.50 lots. The investor copies that position as 2.50 x (5000/2000) x 0.5 = 3.13 lots

## **Fixed Lot Allocation**

`Investor’s position = Investor’s fixed position size (Ratio)`

The investor’s position size is fixed and is defined in advance for each position that will be copied regardless of balance, equity, or free margin of both master and investment accounts.

**Example**

Ratio = 0.1

The master trader opens a position of 0.85 lots. The investor copies that position as 0.1 lots (regardless of the position size in the master account and of the balance, equity, or free margin of both master and investment accounts).

## **Ratio Multiplier** (also called the Lot Allocation method)

`Investor’s position = Master trader’s position x Ratio`

The investor’s position size is a multiplier to the master trader’s position size regardless of the balance, equity, or free margin of both master and investment accounts.

**Example 1**

Ratio = 1

The master trader opens a position of 2.50 lots. The investor copies that position as 2.50 x 1 = 2.50 lots (the same position size as in the master account).

**Example 2**

Ratio = 0.5

The master trader opens a position of 2.50 lots. The investor copies that position as 2.50 x 0.5 = 1.25 lots (half of the position size in the master account).