What is contract copying? One article to understand the underlying logic behind following orders

What is following?

Copytrading is a portfolio management tool that allows users to copy the trading strategies of other professional traders and execute them in the market. The purpose of CopyTrading is to allow users and traders to have the same trading strategies. As professional traders, they can promote trading strategies and obtain profit sharing.

What are the key terms on the trader’s homepage?

Total income: that is, the total income of the trader’s account, net income after deducting capital fees and rebate income;

Total income of followers: all traders who follow this trader The profits generated by the followers.

Trade winning rate: The proportion of profitable times in the trader’s historical orders to all the times opened.

Current share ratio: The reward share that needs to be paid to the trader when you make a profit from following the order.

Average profit: the average profit amount of all historical profit orders of all followers.

Average loss: the average loss amount of all the followers’ historical loss orders.

Profit-loss ratio: That is the ratio of average profit to average loss.

Average holding time: The average time it takes for all trader's trade orders to be opened to closed.

Transaction frequency: The average number of positions opened within a week since the trader brought the order.

Trading pair preference: The trading pair with the highest proportion of open positions in the trader's historical transaction orders.

What is the logic of the follower

The follow-up transaction is based on the trader’s position adjustment quantity, and the follow-up transaction quantity (downward Rounding) = copying ratio * position adjustment quantity. If the quantity is less than the contract’s minimum copying quantity, the order will not be followed.

Then the follower’s tradable quantity is calculated based on the follower’s available funds and the set contract leverage; if the calculation result ≤ the follower’s tradable quantity, the follower’s order is successful, otherwise the follower’s order fails. .

Without considering the copy multiple, leverage system and single transaction constraints, the follower will copy the trader’s position changes until the funds for the copy are not allowed. When the trader reduces the position of the corresponding copy contract, the follower will have available funds accordingly.

How to share profits in copy trading

After the follower clears all copy contracts, the profits from the original closed positions to be distributed to traders will be frozen and will be unified before 10 o'clock the next day Profit distribution will be carried out after settlement, total profit = total profit - total loss.

If the follower stops following the order, the share settlement will be carried out immediately, the remaining funds will be returned to the follower's contract account, and the trader's profit share will be distributed before 10:00 the next day.

Sharing ratio: set by the trader, and parameter modification is not supported after the [Trader] function is turned on.

Profit sharing = ∑ (profit and loss amount of a single contract) * sharing ratio; if the profit sharing > 0, it will be divided immediately; if the profit sharing ≤ 0, no sharing will be made, and the original frozen profit will be returned to the follower's account .

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