Setting & Understanding Increase/Decrease Types
Understanding Increase Types
We aim to directly copy the actions of traders as closely as possible, striving for a 1:1 ratio. However, since we cannot predict the exact number of increases or decreases a trader will perform on a single trade, we've developed a mechanism to allow us to copy traders who open their positions using multiple buy orders. This mechanism helps manage risk and accurately mimic their behavior. To achieve this, we've introduced the Increase Size by % feature.
Increase Size by %
Essentially, after the Initial Position opens (which is a fixed number), we copy all increases according to the ratio specified by the user.
In the example below, we use $5,000 as the Initial Position and a Max Increase % Limit of 100%.
👊 Trader A: open long BTC for $20,000 and avg price of $20,000
You: open long BTC for $5000 and avg price of $20,000. In this case, we use $5000 as the Initial Position Size
Trader A: increase BTC long to $40,000 (a 100% increase)
You: increase BTC long to $10,000 (a 100% increase)
Trader A: decrease BTC long from $40,000 to $36,000 (a 10% decrease)
You: decrease BTC long from $10,000 to $9,000 (a 10% decrease)
Trader A: increase BTC long from $36,000 to $100,000 (a 180% increase)
You: increase BTC long from $9,000 to $18,000 (a 100% increase). In this case, we increased your Trade by the Maximum Increase % Limit of 100%.
Limiting Increase Amount
To provide an additional layer of protection, we allow users to limit the number of increases. This enables users to know the theoretical maximum position size.
In the example below, we use $1000 as the Initial Position, Max Increase Limit of 100%, and a Limit Increase Amount of:
$1000*(1 + 1.0) ^ 4$
You: open long BTC for $1000 and avg price of $20,000.
Increase 1
Trader A: increase BTC long to $40,000 (a 100% increase)*
You: increase BTC long to $2,000 (a 100% increase)*
Increase 2
Trader A: increase BTC long from $40,000 to $80,000 (a 100% increase)*
You: increase BTC long from $2,000 to $4,000 (a 100% increase)*
Increase 3
Trader A: increase BTC long from $80,000 to $200,000 (a 150% increase)
You: increase BTC long from $4,000 to $8,000 (a 100% increase)
In this case, we increased your Trade by the Maximum Increase % Limit of 100%.
Increase 4
Trader A: increase BTC long from $200,000 to $1,000,000 (a 400% increase)
You: increase BTC long from $8,000 to $16,000 (a 100% increase)
Increase 5
Trader A: increase BTC long from $1,000,000 to $2,000,000 (a 100% increase)
You: No action was taken due to the Increase Limit of 4. Alert message sent to your Telegram.
As illustrated in the example, with a $1,000 Initial Position, a Max Increase Limit of 100%, and a Limit Increase Amount of 4, the maximum position you could reach is $16,000.
To calculate the maximum position size based on the example above, use the following formula:
Maximum Position Size = Initial Position * (1 + Max Increase Limit) ^ Limit Increase Amount
In this example, with a $1,000 Initial Position, a Max Increase Limit of 100% (1.0), and a Limit Increase Amount of 4, the calculation would be:
Maximum Position Size = $1,000 * (1 + 1.0) ^ 4 = $1,000 * 2 ^ 4 = $1,000 * 16 = $16,000