Capital Allocation: How Much to Allocate Per Leader

Capital allocation is the most important decision a copy trader makes. It determines how much of your account is deployed when a leader opens a trade.

Three allocation models

Fixed dollar: $500 per trade regardless of leader size.
Fixed ratio: 10% of the leader's notional value.
Fixed contracts: 1 contract for every 10 the leader trades.

Allocation models comparison — Choose an allocation model that matches your account size and risk tolerance.

The 5% rule

Never allocate more than 5% of your equity to a single leader trade. This keeps a normal losing streak from causing a large drawdown.

Example

With a $10,000 account, allocate no more than $500 per leader trade. If you copy 3 leaders, your total deployed capital is still capped by your settings.

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