Social trading allows beginner traders to follow experienced providers and copy their trades automatically. Understanding the difference between source trades (the provider’s original positions) and copied trades (your mirrored positions) is essential for managing your subscription confidently. This guide explains volume scaling types, risk settings, and how these options impact your account performance.
- Source trades: Positions opened by the Social Trading provider.
- Copied trades: Positions replicated in the Follower's account based on the provider’s trades and your chosen settings.
The key difference lies in volume scaling - how trade sizes are adjusted between accounts:
Volume Scaling Options
When copying trades, you can choose how volumes are calculated. Here are the main methods:
Auto scale
The ratio of a copy's volume to the original volume is equal to the ratio of the follower's and provider's Compared values. The result is then multiplied by the Ratio multiplier.
- Compared Value: Can be balance or equity.
- Ratio Multiplier: This setting automatically adjusts the size of copied trades based on the ratio between the Follower’s account value and the Provider’s account value at the moment of copying. The comparison can be made using either balance or equity, depending on what the Follower selects. When set to 1, the ratio remains unchanged.
- Small Volume Handling: The system rounds up volumes close to the minimum lot size. You can choose to either Skip low volumes or risk it by rounding to the lot limit. Please note, that the option carries a risk of increased margin usage.
Let's look at the Example: Provider's capital is $10`000 and Follower's capital is $1`000. The ration between Provider and Follower's funds is 10`000/1000= 10:1. So if the Provider opens 1 lot, the Follower will copy 10 times less: 1/1 0= 0.1 lot will be copied into Follower's.
Multiply
Adjust the volume of the Follower to be larger or smaller than the original trading volume of the Provider. This option applies a fixed multiplier to the values opposed to the Auto scale option. If you choose this option, you need to set the:
- Volume Multiplier value (must be more than 0, when set to 1, the number of lots will be exactly as opened by the Provider.)
- and the Small volume Handling.
Remember, if you choose to replicate the provider’s exact trade volume, ensure you have sufficient free margin in your account. If, at the time of copying, your available funds are insufficient to open the trade, it will no be opened.
For Example, If Provider opens 1 lot and Follower sets the multiplier to 0.5, Follower's account will open 0.5 lots.
Fixed
Every copied trade uses the same fixed volume you specify. Set a specific volume each new trade will be created in regardless of the Provider's volume.
For Example, If the follower selects the Fixed mode and sets the copied trade volume to 0.5 lots, then every copied trade will always be 0.5 lots -regardless of the size of the provider’s original trade.
Next Steps
- Set up Volume Correction and
- Learn more about Risk Management in Social Trading