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TeleTrade Invest is a service that enables Investors to participate in trading in the Forex and CFD markets by copying trades executed by more experienced Traders. Investors can employ their funds without being required to be able to make prompt decisions on their own, and execute individual trading transactions in the market manually, while Traders may get extra income in the form of commission reward for successful trades that Investors make based on copying of the Trader’s transactions.
| INVESTOR | TRADER |
|---|---|
| Registers as an Investor | Registers as a Trader |
| Selects a Trader from the Rankings | Executes trading transactions by using own equity (the amount in the Trader Account must be at least $2,000) |
| Links their Account to a Trader Account | Trades are copied to a respective Investor Account |
| Gets financial results in proportion to the Trader's yield | Receives a commission reward based on the Investor's profit |
How does an Investor make money?
An Investor sets a specific ratio of trade-copying when linking his Investor Account to a Trader Account. The volume of a trading transaction on the Investor Account is calculated based on this ratio, and also the relation between the Investor’s equity and Trader’s equity.
Investor's transaction volume = Ratio x Investor's equity Trader's equity x Trader's transaction volume
*The equity includes own funds in the account balance.
Investor-Trader Interaction
Let's say, an Investor became interested in the trading track record and strategies of a certain Trader, whose commission fee is 10%. Investor linked his Investor Account with the account balance of $10,000 to a respective Trader Account, and then set the copying ratio at 100%. The Trader opens a BUY position of 0.5 lots in EUR/USD at the price 1.12, having the amount of $5,000 in his trading account.
The Trader closes the BUY position of 0.5 lots in EUR/USD at 1.13 and locks in a profit of $500. In this case, the Investor's profit is $1,000. The Trader's reward of $100 (10% of the Investor's profit) is reserved in the commission retention account, and then it is distributed between the Trader and Investor during the settlement procedure.
Trader
Equity: $5,000
Volume: 0.5 lots
Investor
Equity: $10,000
Volume: 1 lot
Trader
Equity: $5,500
Volume: 0.5 lots
Investor
Equity: $11,000
Volume: 1 lot
Investor
Profit: + $900
Investor
Equity: $10,900
Commission
retention account
+ $100
Settlement of Commissions
Let's assume that an Investor and Trader have been collaborating for some time, and during that period the Trader executed both profitable and loss-making trading transactions. Let's see how the Trader's and Investor's amounts in equity were changing and how these amounts resulted in changes in the commission retention account.
| Trader | Investor | Retention Account | ||||||
|---|---|---|---|---|---|---|---|---|
| Trans act ions |
Trader’s equity |
Volume, lots |
Profit/ Losses |
Trader’s equity |
Volume, lots |
Profit/ Losses |
Commission on Profit |
Retention Account Balance |
| 1 | 5 000,00 $ | 0,5 | 500,00 $ | 10 000,00 $ | 1,00 | 1 000,00 $ | 100,00 $ | 100,00 $ |
| 2 | 5 500,00 $ | 0,3 | -300,00 $ | 10 900,00 $ | 0,59 | -590,00 $ | 0,00 $ | 100,00 $ |
| 3 | 5 200,00 $ | 0,8 | 600,00 $ | 10 305,45 $ | 1,59 | 1 189,09 $ | 118,91 $ | 218,91 $ |
| 4 | 5 800,00 $ | 1,0 | 800,00 $ | 11 375,64 $ | 1,96 | 1 569,05 $ | 156,91 $ | 375,81 $ |
| 5 | 6 600,00 $ | 1,3 | 1 000,00 $ | 12 787,78 $ | 2,52 | 1 937,54 $ | 193,75 $ | 569,57 $ |
| 6 | 7 600,00 $ | 1,5 | -700,00 $ | 14 531,57 $ | 2,87 | -1 338,43 $ | 0,00 $ | 569,57 $ |
| 7 | 7 900,00 $ | 1,0 | -600,00 $ | 13 193,14 $ | 1,91 | -1 147,23 $ | 0,00 $ | 569,57 $ |
| 8 | 6 300,00 $ | 1,2 | 1 000,00 $ | 12 045,91 $ | 2,29 | 1 912,05 $ | 191,20 $ | 760,77 $ |
| 13 766,75 $ | ||||||||
During the settlement procedure, the Investor's equity is $13,766.75, and the amount in the retention account is $760.77. The calculation is as follows:
The Trader's reward is a part of the commission accrued in the retention account, which is due to the Trader and calculated based on the Trader's performance:
- the profit from all transactions in the Investor Account: $4,527.53
- the Trader's reward (10%): $452.75
A commission refund to an Investor is a part of commission accrued in the retention account, which is then refunded to a respective Investor Account:
- the refund to the Investor: $308.02
The total result of the Investor and Trader cooperating during the accounting period:
- equity in the Investor Account: $14,074.77
- the Investor's profit: $4,074.77
- the Trader's reward: $452.75
