ZuluTrade has redesigned the formula that automatically allocates lots to providers. All users that have used the old formula have now been switched to CUSTOM mode and preserved their lot size settings.
The updated Auto Allocation Mode formula calculates lot allocation based on each signal provider’s Necessary Minimum Equity (NME) which is the minimum required capital to execute all trades of a signal provider by one micro lot volume per trade
User provides the Risk Meter Bar value (0%-100%) indicating the amount of capital that will be risked in the worst case scenario according to historical data. Please note that this calculation can exceed expectations if signal providers execute worst trades in the future. The formula will then auto-fill the “Lots” box for each provider. Each provider also has a Risk Weight factor (1-5) that can be set by the user and will assign more lots to providers with higher factor and less to providers with lower factor.
The exact calculation formula is provided below in 2 steps:
Step 1 – Calculate Available Capital to risk
Firstly, we calculate user’s available capital based on the risk percentage is he willing to take.
Step 2 – Calculate Lots for each provider based on NME and risk weight
Now using the available capital found in previous step, we calculate the number of lots we can assign to each provider in user’s portfolio based on provider’s Necessary Minimum Equity (NME).
User also has the ability to allocate his available capital differently to each provider specifying different weights.
Visual Representation
Notes
| Balance: Account’s current balance |
| Capital Available: Amount of money user may risk |
| Necessary Minimum Equity (NME) is the minimum capital required to trade all trades from each Provider in your account, if you were trading micro lots. |
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- PraetorianGuard – Promising ZuluTrade Signal Provider
- FXDD Auto: Review
- ZuluTrade Alchemy – Cool New Feature
- Update on my adventures with FXDD Auto
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October 7th, 2012 at 11:30 pm
How sure are you that this calculation is effective have you try it by yourself? Did you encounter problem? if so, How did you resolve that?
October 8th, 2012 at 12:33 am
I’m pretty sure this is effective as otherwise Zulutrade would not use this method.