Method 3 (Mirror)
Introduction
Method 3 (Mirror) is a copy trading strategy offered by Dextrabot that enables proportional risk allocation based on relative wallet sizes. This document outlines the key implementation details and important edge cases when using Mirror mode.
Key Parameters
Scaling Parameter
The scaling value that determines your risk exposure relative to the source trader.
Values:
100: Mirror exact same risk (1:1 ratio)
50: Half the risk exposure of source trader
200: Double the risk exposure of source trader
Example: If scaling is set to 100 and source trader risks 5% of their equity, you will also risk 5% of your equity.
Calculation: Your position size = (Source Position / Source Equity) × Your Equity × (Scaling / 100)
Configuration Options
Copy Current
Toggle: On/Off Function: Allows copying existing open positions from source traders when you start following them
Copy Increase as Open Position
Toggle: On/Off Function: When enabled, treats each position increase as if opening a new position.
Stop Loss & Take Profit
Format: Percentage-based automatic exit levels Application: Applied to all positions opened using Method 3 Execution: Automatically triggered when specified profit/loss thresholds are reached
Include TWAP Orders
Toggle: Off/On 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.
Future Listed Tokens
Toggle: On/Off Function: Enables automatic copying of trades on newly listed tokens
Asset Management
Include: Specify which tokens to copy from available list Exclude: Define tokens to avoid copying Selection: Use dropdown to manage included/excluded assets
Tag & Run
Tag: Label for organizing trading strategies Run: Toggle to activate/deactivate this Method 3 configuration
How Mirror Mode Works
Mirror mode uses a scaling parameter to determine the proportion of trade size relative to account equity. The system calculates position sizes by comparing the equity ratios between the source trader and follower wallets.
How Increase Works
When the source wallet increases a position, the system calculates the proportional increase for the follower wallet based on:
The size of the increase relative to the source wallet's equity
The follower wallet's equity
The scaling parameter
The system ensures that increases maintain the same risk proportion as the initial position.
How Decrease Works
When the source wallet decreases a position, the follower position decreases by the same percentage as the source position. For example:
If the source wallet decreases its position by 10%, the follower wallet will also decrease by 10%
This ensures that position sizing remains proportional throughout the trade lifecycle
What is Copy Current?
Copy Current is a feature that allows a follower to start mirroring an existing position of the source wallet. When activated, the system calculates the appropriate position size based on:
The current source position
The equity ratio between source and follower wallets
The scaling parameter
This allows followers to join trades that are already in progress while maintaining proportional risk.
Important Note: You can use mirror method on more than one wallet at the same time, however, in that case closely monitor the equity ratio.
Basic Scenarios:
Mirror mode calculates position sizes using this formula:
Follower Position Size = (Source Position / Source Equity) × Follower Equity × Scaling
Critical Cases When Changing Scaling Parameter
Case 1: Existing Positions After Scaling Change
When a user changes the scaling parameter while positions are still open:
All existing open positions will continue to use the previous scaling ratio until they are fully closed
The system maintains position tracking based on the scaling parameter that was active when the position was initially opened
This ensures consistency in risk management for already established trades
Case 2: New Positions After Scaling Change
After modifying the scaling parameter:
Any new positions opened by the source trader will be copied using the new scaling ratio
The system calculates position sizes based on the current scaling setting
This allows for immediate implementation of the user's updated risk preferences
Case 3: Direction Change After Scaling Modification
If the source trader changes position direction (e.g., from long to short) after a scaling change:
The follower system first closes the existing long position completely
Then opens a new short position using the new scaling ratio
Important detail: In direction change scenarios, the operation happens in a single transaction - the system opens a short position of size equal to (long position size + new short position size)
This ensures proper tracking and maintains the desired risk profile
Critical Cases When Source Wallet Equity Changes
In Dextrabot’s Copy Trading System, follower wallets dynamically adjust their positions in real-time based on the source wallet's updated Perp Equity and latest position size.
📌 Equity-Based Dynamic Recalculation
Whenever the source wallet:
receives a deposit or withdrawal, changing its Perp Equity
or modifies the size of an open position (increase/decrease)
→ the follower wallet recalculates the size of its currently open position for that specific token.
This recalculation is based on the new ratio between the follower's current equity and the updated Perp Equity of the source wallet.
🔁 Position Rebalancing Behavior
If the follower’s current position no longer matches the updated ratio, it will be adjusted accordingly.
This can result in:
an increase, if the new calculated size is larger than the current size
a decrease, even if the source wallet increased the position, if the new ratio yields a smaller size
This ensures that follower wallets are always aligned with the latest position structure of the source wallet—not just in direction, but in proportional exposure as well.
✅ Why It Matters
This dynamic adjustment allows Dextrabot to maintain consistent risk mirroring even when traders make equity-altering moves. It also helps avoid overexposure or lagging positions due to outdated ratios.
Implementation Notes
The system always prioritizes consistent tracking of existing positions
Changes to scaling or equity only affect future trades or direction changes
For multi-token portfolios, each token is tracked independently
The follower wallet will only track one trader per token at a time
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