WHAT IS A TRADE LEADER STRATEGY?
Trade Leader strategies are financial investments based on the trading strategies of real-time, energetic and active traders. They are dynamic and risk weighted investment strategies where investors select them as auto trade strategy to create their portfolio based on execution only.
Whenever an underlying strategy (Trade Leader Strategy) places a trade, the Trade Leader Exchange (TLEX) replicates it on behalf of the investors (Trade Follower) with minimal latency.
TLEX independently controls Trade Leader risk by leveraging/de-leveraging the original strategy’s risk to match three strategy risk levels, via three investor’s attitude towards the risk. TLEX also intervene if risk oversteps the investor’s risk tolerance, appetite or thresholds. This allows investors to benefit from the trader’s intellectual property, experience and expertise of Trade Leaders by an independent risk management service.
f a client is looking to open a social trading account, they must successfully pass the firm’s Customer Due Diligence (“CDD” and Enhanced Due Diligence (“EDD”), where required), and is subsequently categorised by the firm in accordance with Chapter 3 of the FCA’s Conduct of Business Sourcebook, plus an additional Suitability and / or Appropriateness Assessment form.
Each Trade Leader strategy will be available to investors in three different risk levels. TLEX will leverage/de-leverage the positions based on the client’s risk appetite.
High Risk = TLEX Leverage/de-leverage copy trade to VaR 50%
Medium Risk = TLEX Leverage/de-leverage copy trade to VaR 25%
Low Risk = TLEX Leverage/de-leverage copy trade to VaR 10%
John is an investor with low Risk appetite. He opens $10,000 trading account to invest in Trade Leaders strategies. His first pick is a Trade Leader currently trading on his $20,000 account.
Based on his attitude towards the risk, he has invested $5000 from his $10,000 available in his trading account in that strategy.
TLEX analyses the trades and leverages or de-leverages John’s allocation against the trade leader’s account and adjusts the copy trade strategy to match a VaR of 10% and whenever the Trade Leader Execute trades, immediately after, a trade will be executed at market best price in the investor account based on allocated amount e.g., Trade Leader Execute 1 Lots Buy EURUSD on $20,000, immediately after, a trade with 0.25 lot will be executed at market best price in the investor account with a total risk tolerance of 10% loss on the $5000 invested amount.
TLEX adjusts the investors’ new position and size whenever the trader’s risk management oversteps risk tolerance thresholds into a higher risk level.
CUT OFF POINT
With social trading, the investors have full control over their account and can intervene at any time and remove trading strategies, close open positions, and add stop-loss or take profit.
Investors are allocating funds to each Trade Leaders strategy from their trading account. They also set the maximum risk they are willing to take on the allocated money. TLEX monitors the system in real time and continuously checks the floating open positions and closed positions. If the floating open position and closed position is equal to the maximum risk set by investor on allocated money, the positions of the Trade Leader related to that strategy will be closed, the investor will be notified and that strategy will be blocked in the portfolio.
there will be $0.1 per mini lot per side in addition to the normal manual trading fee, paid to signal providers. e.g. $0.45 per mini lot per side on manual trading + $0.1 per mini lot per side on social trading = $0.55 per mini lot per side
- Copy the trades of experienced traders directly into the investor’s portfolio;
- Individually set risk parameters e.g., maximum positions, leverage per trade and cut off point;
- Make immediate changes in portfolio according to risk preferences;
- Filter copy trades based on time and day;
- Copy a single instrument (top performing instrument) or an entire portfolio;
- Remove a trader from a portfolio and stop following a trader at any time; and
- Build a diversified; non-correlated portfolio and automatically copy risk-weighted strategies from Trade Leaders into a trading account with full control and transparency.
The following is the Risk categorisation when Investor following a Trade Leader’s strategy.
|Strategy Risk category||VaR Risk on investment|