Trade size scaling: overleveraged

The trade size scaling is a very good and simple thing but there’s a major risk for overleveraged forex trading when scaling is set to a low % of the model account size.

Model account:


Signal: 12 forex contracts


$5.000 (5% scaling factor)

Signal: always gets at least a 1 contract signal (should be: 0.6 = 5% of 14 = NO TRADING)

Of course I understand allowing a lot of trading for many of the involved parties is nice: vendor, C2 and brokers… yet, a signal seriously below 1 contract should be: no trading.

Or am I missing something?

That logic was designed many years ago and the reasoning was as follows.

Let’s say the system is long 12 lots and your scaling is 10%.

Your account will be long 1 lot.

Now the system places 12 closing orders are different prices.

You will have 12 1-lot closing orders.

If we were to follow your scaling logic you would have zero closing orders (10% x 1 lot = 0.1) and your account would be exposed to much risk. If Sync was disabled you would never even get out of the position.

Thanks Francis for the answer… clarifies the initial idea…

but the problem remains… can’t we have the best of two worlds? Must be not that difficult algoritm to program right?

Wouter & Martijn

Hi, Matthew… you remain quite quiet about this one? :wink:

Don’t mean to bug you lately btw…


There is no suitable answer. I’m not sure what “the best of both worlds” specifically means, in terms of an algorithm that can be programmed.

We have stewed these ideas for many years. It always comes down to a “pick your poison” trade-off decision. If we do not round upwards when applying the “scaling percentage” to trades, we will find yourself in situations where an AutoTrader does not close positions that should be closed. (Or alternately, we will get complaints from AutoTraders saying, “I missed a great trade because you refused to open a trade at quantity 1 and instead rounded down to zero.”)

When choosing between the trade-offs, we decided the following.

A subscriber has chosen to follow a trader – has specifically signed up to receive his signals – and so, when choosing whether to act upon these signals or not, most people would probably prefer to act, at small and controlled quantities.

Keep in mind that you can apply a Max Lots (or Max Futures Contracts) setting to your C2 AutoTrade preferences, which will prevent more than the X units from ever staying open in your account. In theory that eliminates the risk you are worried about.

There used to be an easy solution for this. In the original and best implementation of Autotrading Setup you could set your lot size as small as you wanted. That’s why there was no reason to skip any trades because they were too big.

In the current very difficult to use Autotrading Setup I don’t see this possibility any more. Why was it removed (my guess is the same that applies to many other features: haven’t implemented it in the new UI yet) and can we get it back?

We simplified the AutoTrading setup screens because we don’t want to allow situations to develop where users fall out of sync with their systems. That costs everyone money and heartache.

You wish to return to the days where “you could set your lot size as small as you wanted.” But I’m not sure what that means, exactly. Are you saying you want to be able to set a fixed lot size per signal? - i.e. no matter what the vendor enters, you want to always trade a certain quantity, say - for example - one?

How would you handle situations like the following sequence of trades:

Buy 1

Buy 2

Buy 4

Sell 3

Sell 4

You are proposing (I think … if I understand your request) that we remove money management from the hands of the system vendor.

This might be okay in some cases, but it would make many systems untradable – specifically those that leg in and out of complex positions.

Am I misunderstanding your request?


P.S. Per your earlier comment: We do plan to introduce a new AutoTrade setup screen which allows you to see all your settings on one screen and make adjustments to particular aspects of the configuration without walking through the entire Setup Wizard each time.

Matt, don’t forget my real trade information request from the old (yet often times more advanced) site.

“sometimes old is better”, Pet Cemetery


Not forgotten. In queue.


I believe you misunderstood because this feature used to be there and it worked fine.

The current setup says “1 minilot = 10 000”. Before when I could modify the lot size I had set it to 1000. So I’m not saying what you suggest (all trades same size), I’m just asking to return the possibility to modify lot size which enables trades smaller than 10 000 currency units.

And thanks for planning to get (back) to more usable autotrading setup.


I’d like to add that I still have this lot = 1000 setting in force because I haven’t used the new Autotrading Setup for forex systems. For example I’m currently long 2000 GBP/USD.


And here is our previous discussion about it:

Matthew: "Lot size specification is indeed missing, since most gen3 traders are now using minilots (10,000 units). That’s good feedback… I’ll add it to an “Advanced” configuration screen."

I just want to set your expectations Panu: the minimum lot size currently supported for gen3 is 10,000. We never supported smaller lot sizes. It’s not a UI issue at C2.


I’m not using Gen3.