The frequently asked questions on the Social Trading platform are divided into 2 sections - FAQ for traders and FAQ for investors.
Profitability is computed using the following formula:
P means “profitability in %”
E_begin_X means “funds available at the beginning of the period X”.
E_end_X means “funds available at the end of the period X”.
N means “the latest settlement period”.
A rollover or any other balance operation marks the end of a previous period and the start of a new one, and we therefore recommend that a trader should perform a rollover if he/she needs to separate one trading session from another. The formula defines profitability in % from the the moment of registering an account.
A trader's profitability depends only on the results of his/her trading operations. Deposits and withdrawals have no influence on account profitability rates. This has to be taken into consideration when an account balance changes due to balance operations.
Here's an example.
Let's assume a deposit of $500 is made into a trader's account. Some time later, the deposit becomes reduced to $100 following unsuccessful transactions, which is 80% less. This is displayed in the ranking.
To return the profitability rate to a break-even level, the trader needs to increase the capital fivefold (from $100 to $500) by showing positive performance.
The trader decides to top up the account to exit the drawdown in a more comfortable way and pays $50. The aggregate deposit becomes equal to $150. However, the account profitability remains unchanged at -80%.
Let's assume then that the account deposit becomes equal to the initial one, $500, as a result of profitable transactions carried out in the account.
Profitability = ((100/500*500/150)-1)*100 = 33.33%
Note that this fivefold deposit increase didn't make the account exit the drawdown: since the trader has made the additional deposit of $50, the aggregate amount of $150 was to have been increased fivefold. It means that in order to exit the drawdown, the trader needs to increase the account deposit to $750,
.e. a trading profit of $250 is still required for exiting the drawdown.
Profitability = ((100/500*750/150)-1)*100 = 0%
1.Sign in to the Social Trading platform using your login (email address) and password from the Client Profile at LiteForex. Set you nickname when launching the platform for the first time. In case you don't have a profile with the LiteForex Company, register it here.
2. Once the registration process completed, move to the "My profile" section and click on the blue button Open Trader's account. You can either create a new account or make one of your existing ECN accounts into Trader's account and then top it up. Please note: only accounts with a positive equity value may become trader's accounts. - Determine your account settings: preset your trader's share and tick other fields based on your preferences, if necessary.
3. Determine your account settings: preset your trader's share and tick other fields based on your preferences, if necessary.
Rollover is a procedure of settling accounts between a trader and his/her investors. Rollover means that a trading period has been completed and a new trading interval begins. If profits have been registered at the end of a trading period, the trader receives his preset share in investor's profits. Conversely, rollover is not performed if no profits have been registered. Only copied trades are considered for rollover.
To perform a rollover, a trader shall click on the button of the same name in the settings of his trader account. A withdrawal of funds from a trader’s account does not initiate a rollover.
Each time a investor detaches his/her account from the trader or withdraws money from his/her account, a rollover is performed automatically on the investor's account.
A rollover does not close any trades. This procedure is meant for settling accounts between a trader and a investor regarding profits made from closed trades, in the amount of a profit percentage pre-defined by the trader. Please note that insufficient equity in a investor’s account during a rollover may result in indebtedness (refer to p.2.5).
We advise traders to perform a rollover if there’s a need to separate trading sessions, as the profitability formula considers an equity value after every balance operation.
Liquidation of a trader’s account means that this account is no longer used as a trader’s account and all investors' accounts are detached from it. Liquidation of a trader’s account is obligatorily preceded by a rollover. To initiate liquidation, a trader shall click on the red button “Delete trader’s account” in the account settings.
Please note that liquidation does not consist in deleting an account as such but in cancelling the account’s registration in the “Social trading” service. One and the same account may be registered as a trader's one and liquidated many times.
Open trades will be closed at the price valid at the moment of deleting the account.
Here's an example.
Let's assume a trader has increased his/her equity through trading from $500 to $550, registering 10% profitability. The trader has opened new trades and decided to withdraw the profit of $50. The aggregate equity amount becomes equal to $500 and the profitability remains at 10%.
The new trades turned out to be loss-making and the account equity dropped to $450. One would think the profitability should equal 0%, but, as you may have noted, the account equity dropped 10.1%, not 10%, following the opening of the new trades.
As a result, the ranking shows the profitability at -1%. The more equity changes due to balance operations, the more profitability will change in the ranking after another balance operation.
To prevent such situations, we recommend that you shouldn't execute needless balance operations. Instead, try to top up the account or make withdrawals after finishing a trading session and closing trades.
1. Sign in to the Social Trading platform using your login (email address) and password from the Client Profile at LiteForex. Set you nickname when launching the platform for the first time. In case you don't have a profile with the LiteForex Company, register it here.
2. Once you've signed in to the platform, click on the green button Open investor's account. You can either create a new account or make one of your existing ECN accounts into investor's account.
3. Set parameters for your account: choose a trader's account from our ranking; then select one of the 4 copy types; next, set the equity level at which copying of new trades shall be suspended on investor's account, in the account currency. For more details on copy settings and stop level, please refer to items 2.3 and 2.5.
Social Trading platform offers 4 types of copying trades. The investor selects the type and sets the copying settings when attaching their account to the account of the trader. The investor should carefully approach the issue of selecting the copying type, estimate their funds and trading strategy of the trader's account from which they plan to copy the trades.
If the size of your funds differs significantly from the resources available on the trader's account, or you don't have enough experience to evaluate his/her strategy, in order to minimize trading risks use “Copying a fixed share of investor’s equity”.
For more details and illustrations, please refer to the section "Four copy types" on the page "How Social Trading works".
Also, we would advise you to get acquainted with a trader's account description before you choose your copy type and set your parameters. If there isn't any, you can always ask your trader directly via our social networking platform by writing them a private message or through their newsfeed.
Withdrawing funds from investor's account automatically launches rollover. At the same time, the trader's commission will be deducted from the money to be withdrawn. The following formula is applied:
Available funds= Equity-Credit-Margin-Commission,
Where commission means a payment for closed copied trades currently due to the trader (i.e. prospective commission that would be deducted from the account if rollover was performed).
In case there is not enough free equity to pay out a commission after rollover, a partial payment equal to the amount of free equity will take place and a debt will be formed. When one of the investor's accounts becomes indebted, the investor can't create new investor's accounts or withdraw money from his client's profile until the debt is paid off. All investor's accounts are subject to the pause mode (refer to item 2.7).
For the information on when the debt emerged and how big it is refer to our special table. Debts can be paid off by transferring money from a client's another trading account or through any payment system. Please note that several debts shall be paid off in the order of appearance. Repayment of one debt does not cancel the rest of debts.
To restrict potential losses when copying trades, a investor can preset equity stop copying level in his account currency. If the investor's account equity becomes less or equal to this value, the copying of new trades will be temporarily suspended ("pause" mode on). At the same time, the existing trades copied from the trader will be closed synchronously with the corresponding trades on the trader's account.
The Investor’s account equity is checked and compared with the copy stop level every 2 (two) minutes.
Also, you can limit your risks by choosing a specific copy type, for example, copying a predefined % of trader's each trade or copying a fixed share of investor’s equity. Having preset a small percentage of copied trade volumes or using a fixed share of your equity, you can control your risks, but you reduce your prospective profits respectively as well.
The pause mode serves to temporarily stop copying trades and may be initiated in the following situations:
- trader's pause;
- investor's pause;
- automatically, upon reaching a copy stop level;
- debt appearance.
Both traders and investors may initiate the pause mode. The pause mode does not entail trades closure on a investor's account and does not limit trading risks in open trades. It only serves to pause a copying of new trades.
You may change the equity stop copying level at any time.
As for copy type and its settings, they may be changed only when there are no open trades in the account.
You may attach several trading accounts to the trader's different accounts. Wise distribution of funds among these accounts will allow you to reach the highest copy trading efficiency. You can determine special copy settings for each of your accounts too.
But remember, an investor's each account may be attached only to one of the trader's accounts.
For some of the following reasons:
- Volume of the trade to be copied is lower than minimum trade volume preset for the investor's account.
- The investor's account does not have enough funds to open a new position.
- The "Pause" mode has been enabled on the investor's account.
- The "Pause" mode has been enabled on the trader's account to which the investor's account is attached.
- The service has been disabled for an investor or a trader because of indebtedness, for example.
- The investor's account equity is equal to or less than the value specified as Equity Stop Copying Level.
1.The trades may have closed following a change in your account settings. When you change a copy type for your investor's account, all the trades are closed automatically. Also, note that a change in a stop copy level does not affect open trades in any way.
2.You have been using a copy type different from "Copying a fixed share of investor’s equity" and the trades therefore have closed due to Stop Out even if the trader's account remained unaffected.
3.If you have been using a copy type "Copying a fixed share of investor’s equity", refer to item 2.17.
4.Make sure you haven't modified trades copied from the trader's account, set pending orders or opened your own trades. Such an interference with the trader's trading strategy may have caused a change in your account margin level regardless of the trader's account, and Stop Out therefore took place.
What shall be fully realized is that a strictly proportional copying is only possible if copying starts at the moment when the trader does not have any open trades. Otherwise, the volumes of copied trades can't be calculated correctly, which may result in Margin Call or Stop Out on the investor's account, even if the trader's account margin level suffices to keep positions open. We strictly recommend that the investors opting for this copy type remain in contact with their traders to agree on a copy start time. Traders are advised to inform their followers though the Social Trading feed about the best time to start copy trading, as well as about new deposits made in the traders's account. This will allow investors to correct their account equities in time.
So, we can single out the following reasons for early closure of trades when using a copy type "Copying a fixed share of investor’s equity":
1. Divergence of opening/closing prices in the trader's and investor's accounts. Even if the server copies an order within a few seconds, the price can still change.
2. The trader had open trades on his/her account by the time an investor joined him/her, which led to a disproportionate change in the trader's and investor's equities.
3. The investor's independent trading in the copy trading account, which doesn't allow calculating correctly equity ratios when copying trades.
4. The trader's account has been topped up without investor's accounts having been topped up, which has distorted the equity ratios in the accounts.