Copy Trade Definitions

Alpari CopyTrade

Alpari International created Alpari CopyTrade as a shortcut to the markets. Investors choose a suitable Strategy Manager to follow and fund their accounts – then Strategy Managers and our copy trading software take care of the rest. Managers watch the markets and plan their trades. Investor accounts automatically copy those trades and both sides benefit when the Strategy Manager’s performance is positive.

Investor

If you’re following a Strategy Manager, then you’re an Investor. The main benefit of being an Investor is that you may profit from the markets, even if you don’t have the time or the confidence to trade yourself. It’s an excellent way to pick up skills from a more experienced trader while your portfolio could grow. You can fund your account and start investing with as little as $100.

Strategy Manager

Strategy Managers leverage the skills, knowledge and experience they’ve developed to possibly make extra money from any of their profitable positions. In return for following their strategy, Investors pay a percentage of the profits they might make (the profit share) to the Strategy Manager.

Pausing Investment Account

It’s simple to temporarily stop your Investment account. Click on the ‘Pause’ button – all positions will immediately close.

Resuming Investment Account

To take your Investment account off pause, click ‘Resume’ – this opens all positions taken by your Strategy Manager at the prevailing market prices.

Remember: If your Strategy Manager’s margin level is below 100%, your Investment account will not reopen.

Profit Share

As payment for positive performance, the Strategy Manager takes a percentage of the profits their trading strategy has won – this is the profit share. Profit shares are taken 30 days after an Investor deposits. The higher water mark rule kicks in if the Strategy Manager’s account is closed or withdrawn. This is how it works: imagine an Investor deposits $10,000 and the Strategy Manager makes them a 50% profit. The Strategy Manager has set a profit share of 20%, so they are owed $1,000 (20% of the $5,000 profit). If the Strategy Manager’s account makes a loss over month one, and the Investor’s equity drops to $9,000, the Strategy Manager will not receive any compensation. However, if the account shows profit in month two, and the Investor sees their equity grow to $11,000, then the profit share will be $200 (that is, 20% of $1000).

Protection Level

The Investor can set a limit to help guard their investment from heavy losses – this is known as the protection level. Once the capital in the Investor account reaches this level, all positions will either close automatically or a notification will be sent to the Investor who can then close them.

Pay-Out Interval

This is the term for the 30-day period between the Investor first making the deposit and the profit share being paid to the Strategy Manager. Remember, this payment will only happen if the Investor’s account is profitable compared to the last interval.

Pay-Out Date

At the end of the pay-out interval, the pay-out date is the day that the profit share is paid into the Strategy Manager’s account.

Safety Mode

If you want an extra layer of protection over your funds, the safety mode feature could be a good option for you. Safety mode reduces your investment by half. For example, if an Investor had deposited $10,000 and the strategy they were following resulted in a 20% loss, the investor would normally lose $2,000 (20% of $10,000). With safety mode on, they would only lose $1,000. It’s important to remember that this limitation also affects good performances, so any potential profits will also see a 50% reduction when using safety mode.

Investment Coefficient

This represents the amount of trading activity in the Investment account compared to the Strategy account, and is how safety mode is toggled. When safety mode is on, the investment coefficient cannot be over 0.5, meaning that only half of the Strategy Manager’s trades will be copied by the Investment account. This reduces the potential losses and profits the Investment account is exposed to. When safety mode is off, the coefficient is 1 and the Investment account faces the same risks and rewards as the Strategy account. Remember, all values are approximate and your Investment Coefficient factor could be less than the one you have chosen.

Ranking

We rank our Strategy Managers based on a number of factors. Overall returns (minus the profit share) are obviously an important consideration, but so are:

Risk level – if there are two or more Strategy Managers with the same return, the one with the lower risk will have a higher ranking.

Drawdown percentage – the lower the drawdown, the higher the ranking.

Days open – the more days of trading activity, the higher the ranking.

Monthly Return – we weigh the last period of 30 days of activity less heavily in our ranking calculation.

Popularity

A Strategy Manager’s popularity is decided by the number of Investors who follow them, and the total amount of funds invested in their Strategy account.

Aggression

This shows the risk level of a Strategy Manager. The least risk-tolerant are classed as ‘conservative’, while significant risk-takers are ‘aggressive’.

Volatility

This is the average, over a set period of time, of all a Strategy Manager’s positive and negative daily returns. The higher the volatility, the riskier the Strategy Manager is considered to be.

Average Daily Win

This is the average daily profit (in percent) made across all winning (profitable) days on the Strategy Manager’s account.

Average Daily Loss

This is the average daily loss (in percent) made across all losing (non-profitable) days on the Strategy Manager’s account.

Average Daily

This is the average profit and loss percentage of the Strategy Manager.

Sharpe Ratio

The Sharpe ratio shows the relationship between risk and return to help you decide how much risk you’re comfortable exposing your investment to. This is estimated by comparing the Strategy Manager’s trading performance against the risks taken. Those with a higher Sharpe ratio generally might have more success with less risk exposure.

Recovery Factor

Taking the maximum drawdowns into account, a Strategy account’s recovery factor shows how effective, overall, the Strategy Manager’s activity has been. If the recovery factor is negative, the strategy hasn’t recovered from the Maximum Drawdown yet.

Max Drawdown

This is the largest loss percentage that a portfolio would have suffered by investing in a Strategy Manager. It’s the difference between the highest and lowest results of a strategy over a set period of time.