Implementation guide · Copy Trading and Allocation
Equity-Proportional Allocation: A Worked Example
Calculate a pooled equity allocation and distinguish it from independent equity-ratio copying, with unit, timing and executable-quantity checks.
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Published by FxTrusts, a supplier of brokerage and prop firm technology. Prepared with AI-assisted research and drafting; reviewed against the cited public sources. Examples are illustrative. Product links describe our services.
Quick answer
An equity-proportional allocation divides a declared total quantity according to each participant’s share of an eligible equity pool. An equity-ratio copier can use a different denominator, such as provider equity for each follower. State the model before calculating quantities or comparing results.
Choose the denominator before multiplying
For a pooled model, participant weight equals that participant’s eligible equity divided by total eligible pool equity. Multiplying the total allocated quantity by that weight produces an ideal allocation. In an independent copy model, the denominator may instead be the provider’s equity. cTrader Copy documents such an equity-to-equity approach. These formulas can look similar while answering different questions, so do not describe every copy mechanism as dividing one fixed trade among followers.
Take a consistent equity snapshot
Weights can change when equity moves or a participant adds or removes funds. Specify when the snapshot is taken and which accounts qualify for the denominator. A delayed value for one account can distort all pooled weights. Record currency conversion if accounts use different currencies; adding their raw balances would not create a meaningful total. The example below avoids that complication by using one stated currency and one observation time.
Translate ideal weights into valid quantities
The mathematical target may not fit an instrument’s minimum quantity or step. Available margin and per-account limits can add further constraints. Allocation documentation from platform providers illustrates that methods and executable units are implementation-specific. Define whether invalid targets are rejected, adjusted under an authorized rule or handled another way. Do not silently increase a small participant’s exposure just to make a minimum ticket executable.
Reconcile allocation and execution separately
An allocation instruction can be correct while the resulting fills differ because of price, timing or availability. Keep the ideal quantity, any authorized normalization, submitted quantity and executed quantity as separate fields. For a pooled total, verify that the sum of allocated quantities and any explicitly retained remainder matches the original amount. A proportional quantity does not guarantee identical percentage returns after costs, financing and execution differences.
A pooled example and a different copy denominator
Assume eligible equities of 6,000, 3,000 and 1,000 currency units, a total pool of 10,000 and an allocation of 100 units. Ideal pooled quantities are 60, 30 and 10. Separately, a follower with 6,000 equity copying a provider with 20,000 equity at a 100-unit provider trade would target 30 units under a simple independent equity-ratio model. The two denominators must not be mixed.
| Participant | Pool equity | Weight | Pooled quantity |
|---|---|---|---|
| A | 6,000 | 60% | 60 units |
| B | 3,000 | 30% | 30 units |
| C | 1,000 | 10% | 10 units |
| Total | 10,000 | 100% | 100 units |
Implementation checklist
- Name the allocation model and its denominator.
- Use synchronized equity values in a common declared currency.
- Document minimum-size, rounding and capacity treatment.
- Reconcile target, submitted and executed quantities separately.
Sources
These documents support the reference. Check the original publication for current requirements and the limits of its scope.
- cTrader Copy documentationhelp.ctrader.com
- Interactive Brokers default allocationswww.ibkrguides.com
- MQL5 symbol propertieswww.mql5.com
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