MAM - Appendix

Tradeview MAM User Interface fails to start

The Tradeview MAM plugin is a powerful and fast trade distribution and management tool for allocating trades amongst a group of sub accounts. Tradeview MAM plugin has been designed to be extremely flexible and diverse in its operation and can prove a great asset to any broker or money manager.

When a trade is opened by any of the master accounts configured with the Tradeview MAM plugin, the relevant sub-accounts to the master used will be allocated a share of the trade opened, the volume of which will depend on the allocation method in use. The Tradeview MAM plugin supports eight different allocation methods, see the Allocation Methods section here for more details on allocation methods.

Occasionally allocation of a trade will be exposed to rounding, due to minimum lot sizes, and there will be some residual volume unallocated from the master trade. The Tradeview MAM plugin is designed to be able to cope with this residual volume in two ways, via continuous allocation as recommended, or by using overflow. Continuous allocation will distribute any remaining volume evenly between the active sub-accounts in the minimum lot sizes. When using overflow any residual un-allocated volume due to rounding will be placed into a pre-defined overflow account, see the Overflow section here for more details on overflow.

NOTE: If the residual volume is less than the minimum lot size defined in the sub-groups securities then this volume will be discarded, potentially causing discrepancies between master and sub accounts.

Once a sub-account is configured to be used with a master account, any balance deposit or withdrawal made to the sub-account will be instantly reflected by the master account balance. If a sub-account has a pre-existing balance before the master account is added to the plugin configuration and performing a server restart, then this balance will not automatically be reflected in the master account balance and will need manually adjusting. Any account that is added to the master after these steps have been performed will automatically have its balance reflected by the master account.

When using continuous allocation, if a client with an active sub-account wishes to close out a trade that has been allocated through the master trade, either manually, or if they are stopped out, the master account will accommodate this by adjusting the original master trade. This is done by opening a new master trade with equal volume to that of the closing client trade, but in the opposite direction. The master account will then perform a ‘close-by’ of the original master trade against the new mater trade to reduce the overall volume of the original trade by the correct closing client volume. If using overflow the overflow account is updated to reflect this closing sub-account trade.

The Tradeview MAM plugin has also been designed to allow users the ability to remove an active client from the master allocation, even if the sub-account has allocations for open trades, through the use of the Tradeview MAM user interface. The clients open trades can be dealt with by the plugin quickly, without disturbing other open trades, sub-account allocations for the same trade or the need to restart server. When using the recommended default settings, if a client is excluded from the master account through the user interface, its balance will be instantly withdrawn from the master account and it will be excluded from all future master trade allocations.

Allocation Methods

When using the Tradeview MAM plugin, the allocation of trades opened by the master account can be configured in various different ways, each using its own pre-defined calculations. Each of these allocation methods are explained below:

Equity

The ‘Equity’ allocation method is used to distribute the master trade volume across the sub-accounts based on the accounts percentage share of the total equity of the master account it belongs to. For example if a master account opens a trade for 10.00 lots, and there are 3 sub-accounts active with equities of 10,000, 7,000, and 2,000, the following allocations will be made:

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The residual volume after calculating the allocation between the three accounts is 0.01 lots. This will then be allocated evenly across all of the active sub-accounts if using continuous allocation, starting with the account with the largest equity, and moving onto the account with the next largest equity and so on. The residual volume will be allocated in minimum lots, usually 0.01, therefore all of the residual volume in this example will be allocated to the account with the highest equity. If using overflow the residual volume will be allocated to the overflow account and not to the sub-accounts. See section 6.3 for more information on overflow.

Even

The ‘Even’ allocation method is used to distribute the master trade volume across the sub-accounts evenly, irrespective of balances, equities, etc… The master trade will be divided equally across all active sub accounts. Any residual volume will be allocated to the sub-accounts evenly if using continuous allocation, in minimum lot sizes, starting with the first account on the list and working down. If using overflow the residual volume will be allocated to the overflow account and not to the sub-accounts. See section 6.3 for more information on overflow.

Balance

The ‘Balance’ allocation method is designed to distribute the master trade between the sub-accounts based on their percentage share of the total balance of the master account. For example if a master account opens a trade for 5.00 lots, and the three sub-accounts have balances of 1,000, 5,000 and 10,000 they will be allocated the following volume:

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The total allocation is equal to 4.99 lots, therefore the residual volume of 0.01 lots would be allocated to account 3 as this has the largest balance, making its total allocation 3.13 lots, if using continuous allocation. If using overflow the residual allocation would be passed to the overflow account, for more information on overflow see section 6.3.

Cash Allocation Methods

There are three cash allocations methods described below. Each one of these allocation methods is calculated in the same way as its corresponding rule explained above. The difference with using the cash rules is that no sub-account will receive an allocation of the master trade lots. Instead the sub-accounts are allocated a share of the realised profit or loss of the master trade when it is closed.

Cash Equity

The ‘Cash_Equity’ rule is calculated in the same way as the ‘Equity’ rule, but no allocations of the master trade are made to the sub-accounts at any point. Instead when the master trade is closed the sub-accounts are allocated a portion of the realised profit or loss of the master trade, based on their percentage share of the sub-groups total equity. This stops a sub-account from being able to control closing of their allocated trades manually, assigning a stop loss or a take profit. When the master trade is closed the sub-accounts are allocated a portion of the realised profit or loss, based on their percentage share of the sub-groups total equity. For example if the master trade realises a profit of 230.00 upon being closed, and the equity of the sub accounts is 4,000, 500 and 8,000 then the following profit allocations will be made to the sub-accounts upon closing the trade:

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Cash Even

The ‘Cash_Even’ allocation method will allocate profit and loss realised by the master trade upon closing to the individual sub-accounts equally. No allocation of the master trade lot size will be made to the sub-accounts from the master trade at any point, this disables sub-accounts from being able to close out positions manually, assign stop losses or take profits. The total profit or loss of the master trade will be divided by the total number of active sub-accounts, and each account will be allocated this amount.

Cash Balance

The ‘Cash_Balance’ allocation method will allocate the realised profit and loss of a master trade upon closing to the active sub-accounts, without allocating any lots form the master trade to the sub-accounts at any time. This stops the sub-accounts from closing out their allocation of the master trade, assigning a take profit or a stop loss. The individual allocation will be calculated based on the sub-accounts percentage share of the master accounts total balance. For example if the master account closes a trade and realises a loss of 500, and the sub accounts balances are 12,000, 8,500 and 6,900 then the allocated losses to the sub-accounts will be:

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Lot

The ‘Cash_Balance’ allocation method will allocate the realised profit and loss of a master trade upon closing to the active sub-accounts, without allocating any lots form the master trade to the sub-accounts at any time. This stops the sub-accounts from closing out their allocation of the master trade, assigning a take profit or a stop loss. The individual allocation will be calculated based on the sub-accounts percentage share of the master accounts total balance. For example if the master account closes a trade and realises a loss of 500, and the sub accounts balances are 12,000, 8,500 and 6,900 then the allocated losses to the sub-accounts will be:

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The residual volume after calculating the allocation between the three accounts is 0.02 lots. This will then be allocated across the active sub-accounts if using continuous allocation, starting with the account with the highest lot factor, and moving onto the account with the next highest lot factor and so on. The residual volume will be allocated in minimum lots, usually 0.01, therefore the residual volume in this example will be allocated to account 3 first, making its total allocation 2.86, and then account 2, making its total allocation 1.43. If using overflow the residual volume will be allocated to the overflow account, see section 6.3 for more information on overflow.

Follower

The ‘Follower’ allocation method is used to make the sub-accounts mimic the master account. When a master account makes a trade, each active sub-account replicates this and opens the exact same trade for the same volume as the master. When the master account closes the trade, each client trade is also closed. In this case the master balance is separate to the sum of the sub-account balances, and any sub-account that fails the margin check is not included in that trade, so does not follow the master trade.

Commissions

The Tradeview MAM plugin has been designed to allow users the ability to pass on any commissions incurred to the sub-accounts. By setting the field ‘Allocate Commissions’ to ‘Yes’ in the MultiMAM plugin configuration, any commissions set in the master group will then be allocated to the active sub-accounts proportional to their share of the master account trade. For example if commissions are set for the master group of $100.00 per deal and there are 3 active sub-accounts receiving allocations of 0.10 lots, 0.60 lots and 0.30 lots from a master trade of 1.00 lot, then the master will incur the $100.00 commission for the deal and the sub-accounts will incur commissions of $10.00, $60.00 and $30.00. The total commissions paid by the sub-accounts will be equal to that of the commission the master account incurs.

NOTE: Commissions should only be set for the master group and not for the sub-account group. If ‘Allocate Commissions’ is set to ‘No’ then only the master account will incur the commissions set.