possibility to disabled Equity-toequity ratio
possibility to disabled Equity-toequity ratio
13 Mar 2023, 11:57
Hi,
It would be great if the equity-to-equity ratio could be disabled by the strategy followers.
If the strategy provider is using a % of its balance or equity then the equity-to-equity ratio serves its purpose but if the strategy followed treats each trade the same way with the same amount, as the balance grows, the possibility for a follower to get similar results, will be weaker and weaker.
If the follower's balance is greater than the provider's balance, then the follower encounters greater risk if the strategy followed scale in as the trade goes on.
If the follower's balance is smaller than the provider's balance, then the follower will get smaller results in proportion to its equity.
Best Regards
Replies
florent.herb
13 Mar 2023, 16:11
RE:
Hi Panagiotis :)
Do you mean that whether scale in is involved or not the follower and provider's equity will have the exact same curve? (Even with different initial equity's levels?)
Best Regards
PanagiotisChar said:
Hi Florent :)
That's not true, Equity to Equity ratio keeps everything proportional, that's the whole point of is. If you earn 100%, your follower will earn 100% too.
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@florent.herb
PanagiotisChar
13 Mar 2023, 16:16
( Updated at: 13 Mar 2023, 16:31 )
Hi Florent :)
Yes that is the essence of equity to equity copying. The strategy provider manages all the money like a fund. All investors have similar returns.
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florent.herb
13 Mar 2023, 16:17
RE:
Thank you Panagiotis!
PanagiotisChar said:
Hi Florent :)
Yes that is the essence of equity to equity copying. The strategy provider manages all the funds like a fund. All investors have similar returns.
@florent.herb
ncel01
13 Mar 2023, 20:13
Hi Panagiotis,
As we know, that's almost true.
Hi Florent,
Be aware that there are exceptions to this "concept" that can be really harmful to the investors.
Example:
I publish a strategy with a broker that allows a min. trading quantity of 0.01 units.
An investor starts following my strategy with the same funds as me: equity-to-equity ratio = 1.
However, if the investor's broker only allow a min. trading quantity of 0.1 units, for instance, the position will still be opened! Yes, besides the fact that volume ratio is 1:10, a position will always be open with the min. trading volume, no matter what the volume ratio is!
Of course, there's no equity-to-equity proportion here when comparing the trading volumes.
As result, the investor's account will be drained due to the high exposure and much lower margin available.
It can also happen that a broker suddenly changes the min. trading quantities. I've noticed recently that a broker increased the min. trading quantities on indices from 0.01 units to 1.0 units! Yes, that's 100x more! Brokers can act like this. Usually they "care a lot" about their clients.
For instance, I can automatically stop opening new positions if my broker increases the min. trading quantities. However, there's nothing I can do if this happens on the investors' side.
On the other hand, Spotware could do something if willing to. The reason why nothing regarding this has been done, so far, will remain a "mistery".
Just to keep you aware!
@ncel01
PanagiotisChar
13 Mar 2023, 15:42
Hi Florent :)
That's not true, Equity to Equity ratio keeps everything proportional, that's the whole point of is. If you earn 100%, your follower will earn 100% too.
Aieden Technologies
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@PanagiotisChar