Fixed Ratio and Fixed Lot Sizing in CFD Copy Trading
Summary
The document explains two ways to size trades when copying a CFD trader. Fixed ratio scales copied positions according to the relative account funds, aiming to make the copier’s exposure track the trader’s. Fixed lot copies a preset number of lots regardless of the trader’s position size, so the copier controls size independently of the trader’s money management. The article also defines 1:1 copying, lot multipliers, and maximum copy lot limits, and describes how minimum lot requirements or a user-set cap can make the copied size differ from the calculated size.
Its examples illustrate how capital differences and multipliers can cause copied exposure to diverge from the trader’s, including the possibility of liquidation when a small account uses the same lot size as a much larger one. The guidance favors fixed ratio for beginners and recommends a maximum lot cap. These are general explanations rather than a quantitative comparison: the document provides no performance data, detailed formulas, or asset-specific margin analysis, and its claims about relative risk should not be treated as guarantees.
Key ideas
- Fixed ratio scales copied trade size in relation to the copier’s funds and the trader’s account funds.
- Fixed lot uses the same preset lot size for every copied trade, independent of the trader’s position size.
- Minimum trade sizes and maximum copy limits can change or block the calculated copied position.
- A lot multiplier increases the position size produced by the underlying copy setting and also increases exposure.
- Matching another trader’s lot size can create disproportionate risk when account sizes differ.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.