⚠️ NOTE: Applies Only When Closing Trades with Market Orders
In the development of advanced trading platforms, it's vital to implement features that ensure consistency and reliability. One such feature is Follower Protection, which ensures followers stay synchronized with the leader's trading actions. Below is a detailed explanation of how Follower Protection works and whether it’s something you want to use.
🔐 What is Follower Protection?
Follower Protection ensures that when a leader closes their position and the quantity (qty) reaches 0, all followers automatically perform the same action, regardless of partial trades or any adjustments they may have made.
This prevents followers from being left with open positions, misalignments, or unintended risks. It enhances platform reliability by synchronizing the leader and followers, ensuring positions remain aligned.
🔄 How Does It Work?
When the leader closes their position and reaches a qty of 0:
The system detects that the leader has exited their position.
All linked followers are automatically synchronized to close their positions and reach a qty of 0, even if they have made partial trades or adjustments themselves.
This ensures followers do not hold positions that are misaligned with the leader’s strategy.
💡 A Practical Example
With Follower Protection:
Leader Action:
The leader opens a long position in Mini Nasdaq 100 (Mini NQ) with a qty of 5 contracts.Follower Action:
All followers replicate the leader’s action, opening a long position with 5 contracts.Partial Trade by Follower:
One follower decides to take a partial profit, closing 2 contracts.
The follower now holds 3 contracts, while the leader still holds 5 contracts.Leader Closes Position:
The leader closes their entire position, reducing the qty to 0.Result:
With Follower Protection, the system ensures all followers’ positions are automatically adjusted to qty 0, even if the follower made partial trades. This ensures no unintended short positions are created, and the follower’s portfolio remains aligned with the leader.
Without Follower Protection:
Leader Action:
The leader opens a long position in Mini Nasdaq 100 (Mini NQ) with a qty of 5 contracts.Follower Action:
Followers replicate the leader’s action, opening a long position with 5 contracts.Partial Trade by Follower:
One follower decides to take a partial profit, closing 2 contracts.
The follower now holds 3 contracts, while the leader still holds 5 contracts.Leader Closes Position:
The leader closes their entire position, reducing the qty to 0.Result:
Without Follower Protection, the system will blindly copy the leader’s action and attempt to close 5 contracts for the follower. Since the follower only holds 3 contracts, the system will close those and open a short position of -2 contracts.
The follower is now misaligned with the leader, exposed to additional risks and potential losses.
⚙️ Important Information When Using Follower Protection
When Follower Protection is enabled, Tradesyncer temporarily pauses trade copying for 1 second when the lead account's open quantity (QTY) reaches zero. During this pause, all follower accounts are flattened to QTY 0 to ensure proper synchronization.
If a new trade doesn’t get copied as expected, it might be because the order was placed immediately after closing a position on the lead account.
Solution: Wait 1 second before executing a new trade, allowing Tradesyncer to complete the flattening process and resume trade copying seamlessly.
🚨 Why is Follower Protection Important?
This functionality provides several key benefits:
Risk Management: Followers are protected from unexpected losses by ensuring their positions are synchronized with the leader, even in cases of partial trades.
Efficiency: No manual intervention is required to monitor or correct follower positions.
Reliability: The system ensures accurate alignment between leader and follower accounts, minimizing errors or unintended trades.
🏁 Conclusion
With Follower Protection, we address critical risks in synchronized trading by ensuring full alignment between leaders and followers, regardless of adjustments made by followers. This feature prevents scenarios like partial trades leading to unintended positions or losses.
By automatically closing positions to match the leader’s actions, we ensure safer, more efficient trading for all users. This reinforces our commitment to reliability, ease of use, and transparency in the trading environment.