There are basically two possible reasons for this:
- Your account has been stopped out while the Strategy Provider’s account is not yet stopped out.
- The strategy provider deposited additional funds into his trading account.
Copy-trading uses the logic of the Equity-to-Equity model to define the volume of all open trades. When a provider deposits additional funds, then the system will automatically recalculate the volume of all open trades based on the new equity.
Initially, the Strategy provider’s equity is 4,000 EUR while the Follower’s equity is 1,000 EUR.
The provider opens a trade of 400,000 units (4 lots) on EURUSD.
This trade will be copied with the following volume:
(Follower’s equity / Strategy Provider’s equity ) * Strategy Provider’s volume
(1,000 / 4,000) * 400,000 = 100,000 (1 lot)
Later on, the Strategy Provider deposits 1,000 EUR more in his account.
This will lead to an increase in the provider’s equity and hence the volume of the existing open trade must be recalculated to meet the Equity-to-Equity logic.
The new volume for this trade is now:
(1,000 / 5,000) * 400,000 = 80,000 (0.8 lots).
As a result, the system will automatically close the existing trade partially, by 20,000 units (0.2 lots) so that the Equity-to-Equity ratio is met.
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