> For the complete documentation index, see [llms.txt](https://docs.dextrabot.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.dextrabot.com/copy-trade/methodology/method-1-legacy.md). # Method 1 (Legacy) ### Introduction Method 1 is Dextrabot's copy trading strategy that uses percentage-based allocation for initial positions combined with fixed dollar limits for position increases. This method provides controlled risk exposure while allowing you to scale with your source trader's moves. ### How Method 1 Works Method 1 calculates your initial position size as a percentage of the source trader's margin usage, then manages any subsequent position increases through a separate fixed dollar allocation. This dual-parameter approach gives you proportional exposure to the trader's initial moves while maintaining strict control over additional risk.
Method 1
### Key Parameters #### Use % of Trader Margin per Position **Used Rate**: The percentage of the source trader's margin that will be allocated to your position. **Example**: If set to 10% and the source trader uses $20,000 margin, your position will use $2,000 margin. #### Margin Increase Limit **Increase Limit**: Fixed dollar amount available for position increases after the initial position is opened. **Example**: If set to $1,500, you can add up to $1,500 total through subsequent increases, regardless of how much the source trader adds. ### Configuration Options #### Initial Margin Cap Sets a maximum limit for your initial position size, acting as a safety cap even when the percentage calculation would result in a larger amount. **Function**: Prevents oversized initial positions regardless of source trader's position size. #### Copy Increase as Open Position **Toggle**: On/Off **Function**: When enabled, treats each position increase as if opening a new position, applying different sizing logic to increases. #### Copy Current **Toggle**: On/Off\ **Function**: Allows copying existing open positions from source traders when you start following them. #### Include TWAP Orders **Toggle**: On/Off\ **Function**: Enables copying of Time-Weighted Average Price (TWAP) orders from source traders ## Direction Filter **Toggle:** On/Off\ **Function:** Controls which trade directions are copied from source traders, allowing you to filter trades based on whether they are long or short positions. #### Stop Loss & Take Profit **Format**: Percentage-based automatic exit levels **Application**: Applied to all positions opened using Method 1 #### Future Listed Tokens **Toggle**: On/Off **Function**: Enables automatic copying of trades on newly listed tokens **Risk Note**: New tokens may have higher volatility #### Asset Management **Include**: Tokens available for copying **Exclude**: Tokens to avoid copying **Selection**: Manage which assets to include or exclude #### Tag & Run **Tag**: Label for organizing trading strategies **Run**: Toggle to activate/deactivate this Method 1 configuration ### Practical Example **📌 Method 1: Fixed Allocation with Initial Limits and Increase Limits** * **Enter initial open position amount:** 1000 USD * **Enter budget for increase:** 500 USD * **How it works:** * If the source wallet opens a position with **100,000 USD** and later increases it by **200,000 USD**, * Your copy trade will **start with 1000 USD** and can increase up to **a total of 1500 USD**, respecting your predefined budget for additional fills. * This method helps maintain controlled risk exposure while mirroring a trader’s moves dynamically.

Method 1 Scenarios

### **🔹 Key Actions Explained** **1️⃣ Open Position** * When the copied trader opens a position, your system calculates your allowed size based on your defined percentage and margin cap. * If within the limit, your system mirrors the trade. **2️⃣ Increase Position** * If the trader adds to their position, your system checks whether you still have margin available. * If there’s enough margin left, your position is increased proportionally. * If the limit is reached, no additional trades are executed. **3️⃣ Decrease Position** * When the trader reduces their position, your system checks if the trader's new position size is still above your maximum allowed limit. * If trader's position is still above your maximum limit: No action is taken - you maintain your current position. * If trader's position drops below your current position: Your position is reduced to exactly match the trader's new position size (not proportionally, but to the exact same amount). **4️⃣ Change Direction** * If the trader closes their existing position and opens an opposite trade (e.g., closing a **long** and opening a **short**), your system mirrors this by closing your existing trade and opening the new one based on your limits. ### Important System Rules #### Token Exclusivity Only one trader per token can be followed at a time. If multiple traders trade the same token, the system follows the first trader until their position is completely closed. **Example**: If Trader A opens BTC LONG and Trader B opens BTC SHORT, only Trader A's position is followed until closed. #### Direction Changes When a source trader closes a position and opens the opposite direction: 1. Your existing position closes completely 2. New position opens using percentage calculation 3. Increase limit resets to full availability --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.dextrabot.com/copy-trade/methodology/method-1-legacy.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.