Signals, robots and copy trading
A signal tells you when to buy or sell. A robot trades a set of rules on your account. Copy trading mirrors another person's positions onto your account, usually in proportion to your balance. In all three cases the money at risk is yours, so the size of the position is the part you control.
Set the stop before you follow the entry
A signal gives you a direction and a moment. It does not give you a stop distance that fits your account. The stop is the price where you accept the idea was wrong. You choose that price, not the person who sent the signal.
Compare two readers who both follow the same signal on EUR/USD at 1.0850. The first places a stop 15 pips away on 0.10 lots. The second places a stop 60 pips away on the same size. The first risks 1,628 KSh. The second risks 60 pips x 108.50 KSh, which is 6,510 KSh. The entry was identical. The risk was not.
A wider stop survives more normal price movement, but it costs more if the trade fails. A tighter stop costs less per loss, but it is hit more often by ordinary noise. Neither choice is free. Write the stop distance in pips before you enter, and check the total in KSh against your account.
Check what a robot repeats when the market changes
A robot follows rules without judgement. That is its strength and its weakness. If the rule is 'buy when the price crosses a line', it will buy every time that happens, including during a quiet week when the same line is crossed ten times.
Compare a robot on a trending day and the same robot on a flat day. On the trending day, three trades of 0.10 lots with 15-pip stops risk 4,883 KSh in total. On the flat day, the same robot may open eight trades. Eight trades x 1,627.50 KSh is 13,020 KSh at risk. The rule did not change. The number of signals did.
A robot can also keep trading after you stop watching. The total exposure is the sum of every open position, not the risk of the first one. Before you run any robot, set a maximum number of open trades and a daily loss limit in KSh. If the robot cannot respect that limit, it is not suitable for your account.
Measure the gap between copying and control
Copy trading mirrors another person's positions onto your account, usually in proportion to your balance. If the person you copy trades 1.00 lot and you have one tenth of their balance, your copy may open 0.10 lots. The proportion is set by the platform, not by your comfort with the loss.
Compare two accounts copying the same person. Account A has 100,000 KSh and copies at 0.10 lots. Account B has 20,000 KSh and copies the same trade at 0.02 lots. A 15-pip loss costs Account A 1,628 KSh, which is 1.6 per cent of its balance. The same loss costs Account B 326 KSh, which is also 1.6 per cent. Proportion protects the percentage, not the person.
The person you copy may hold positions overnight and pay swap. Swap varies between brokers and is charged on the amount you hold, not on the amount they hold. Your account carries that charge alone. Check the swap rate on EUR/USD before you copy a position you intend to keep open.
Three ways to follow, one bill of 108 KSh per pip
| Step | Amount | Note |
|---|---|---|
| Signal, one standard lot | 108 KSh per pip | One pip on one standard lot of EUR/USD is 10 units of the quote currency. At 1.0850 that is 10 x 108.50 = 1,085 KSh, so one pip is 108.50 KSh, rounded to 108 KSh here. |
| Robot, one standard lot | 108 KSh per pip | The robot places the same size, so the pip value is the same. The robot does not reduce the size unless you set a limit. |
| Copy trading, one standard lot | 108 KSh per pip | Copy trading mirrors the position, so the pip value follows your account size, not the other person's. |
| Stop 20 pips away | 2,170 KSh | 20 pips x 108.50 KSh = 2,170 KSh. This is the amount at risk if the stop is hit. |
| Two losing trades in a week | 4,340 KSh | 2 x 2,170 KSh. The source of the idea does not change this sum. |
Your broker may round the pip value, charge a spread on entry and exit, and add commission or swap. These charges vary between brokers and are not included above.
Doing it once, step by step
You will now work through four checks that apply to any signal, robot or copied trade before you place it. Do them in order, and write each answer down.
- 01
Write the pip value for your lot size
Take the lot size you intend to use and convert it to KSh per pip. On EUR/USD at 1.0850, one standard lot is 10 x 108.50, which is 1,085 KSh per pip. On 0.10 lots that is one tenth, or 108.50 KSh per pip, rounded to 108 KSh. Write this number beside the trade.
- 02
Set the stop distance in pips
Decide where the idea is wrong and measure that distance in pips. Do not move the stop later to avoid a loss. A stop 15 pips away on 0.10 lots risks 15 x 108.50 KSh, which is 1,627.50 KSh, rounded to 1,628 KSh. That figure is your cost if the trade fails.
- 03
Compare the total risk to your account
Add up the risk on every open trade, not just the new one. Three trades of 0.10 lots with 15-pip stops risk 4,883 KSh in total. If that total is more than a small share of your account, reduce the lot size until it is not. The source of the idea does not change this sum.
- 04
Check the charges your broker adds
Your broker may round the pip value, charge a spread on entry and exit, and add commission or swap. These charges vary between brokers and are not included in the figures above. Ask your broker for the current spread and swap on EUR/USD before you follow any position.
- 05
Set a daily loss limit in KSh
Choose the maximum you are willing to lose in one day and stop when you reach it. This limit applies whether you trade your own ideas or follow someone else's. A robot or a copied account can open more trades than you expect, so the limit must be checked after every entry.
- 06
Record who made the decision
For each trade, note whether the entry came from you, a signal, a robot or a copy. Note the lot size and the stop you set. After ten trades, compare the losses on followed entries with the losses on your own. The record shows what you actually risk, not what you intended to risk.
The mistake most people make here
The common mistake is to follow a signal or a robot and then increase the lot size because the idea came from someone else. The size is still your decision, and a larger size multiplies the loss in the same way it multiplies a gain. Before you follow anything, write down the pip value for your chosen lot size and the distance to your stop. If the total at risk is more than a small share of your account, reduce the lot size until it is not.Check yourself
You copy a trade on EUR/USD at 1.0850 with a 0.10 lot size. One pip on one standard lot is 10 units of the quote currency. What is one pip worth on 0.10 lots in KSh?
One standard lot: 10 x 108.50 = 1,085 KSh per pip. On 0.10 lots that is one tenth: 108.50 KSh per pip, rounded to 108 KSh.
The same copied trade has a stop 15 pips away on 0.10 lots. What is the amount at risk in KSh?
15 pips x 108.50 KSh = 1,627.50 KSh, rounded to 1,628 KSh.
A robot opens three trades of 0.10 lots on EUR/USD, each with a stop 15 pips away. What is the total at risk in KSh?
3 x 1,627.50 KSh = 4,882.50 KSh, rounded to 4,883 KSh. The robot chose the entries, but the total risk is still yours.
Questions that come up next
If the signal provider is experienced, does that lower the risk on my account?
It does not change the risk on your account. The provider's record does not set your lot size or your stop distance. Two readers can follow the same signal and risk different amounts, because each one chooses the size and the stop. Experience on the sending side does not move the loss onto the sending side.
How do I decide the lot size when the entry comes from a robot?
Start from the amount you are willing to lose, not from the size the robot suggests. Divide that amount by the pip value of your chosen size and the stop distance in pips. If the result is a smaller lot size than the robot's default, use the smaller one. The robot's default reflects its own design, not your balance.
What happens if I stop watching a robot that is still running?
The robot keeps opening and closing positions under its rules. Each new position adds to the total at risk, so the exposure can grow while you are away. Set a maximum number of open trades and a daily loss limit in KSh before you start it. A robot that cannot respect those limits is not suitable for your account.
Does copy trading copy the other person's stop as well as the entry?
Platforms differ, so check what your platform actually copies. Some mirror the entry and the exit, some mirror only the entry, and some let you set your own stop. If the stop is not copied, you are choosing it, and the amount at risk is your calculation. Read the platform's description before you copy anyone.
Are the pip values on this page what my broker will charge me?
They are worked examples using the numbers given beside them. Your broker may round the pip value differently, charge a spread on entry and exit, and add commission or swap. Those charges vary between brokers and are not included here. Treat the figures as a method, then check your own platform's costs.
Can I follow a signal and still keep control of the trade?
You keep control of the parts the signal does not cover. The signal gives a direction and a moment. The lot size, the stop distance and the total in KSh are yours to set. Write the pip value and the stop distance down before you enter, then check the total against your account.
The words used on this page
- Signal
- A message that says when to buy or sell an instrument. It gives a direction and a moment, but not a stop distance that fits your account. The size and the stop remain your decisions.
- Robot
- Software that trades a set of rules on your account without judgement. It repeats the rule every time the condition appears, including on quiet days when the condition appears many times. The total exposure is the sum of every open position.
- Copy trading
- A platform feature that mirrors another person's positions onto your account, usually in proportion to your balance. The proportion is set by the platform, not by your comfort with the loss. The money at risk stays yours.
- Pip value
- The money one pip of movement is worth at your chosen lot size. On one standard lot of EUR/USD it is 10 units of the quote currency, which converts to 1,085 KSh at 1.0850. On 0.10 lots it is one tenth of that.
- Stop distance
- The number of pips between your entry price and the price where you accept the idea was wrong. You choose it, not the person who sent the signal. A wider stop survives more normal movement but costs more when it is hit.
- Daily loss limit
- A maximum amount in KSh you are willing to lose in one day. It caps how much a robot or a copied account can take from you before it stops. Set it before you start, not after a losing run.
What to take away
- A signal, a robot and a copy trade each hand over the entry, not the risk.
- The lot size, the stop distance and the total in KSh stay your decisions.
- A robot repeats its rule on quiet days, so count every open position, not the first.
- Write the pip value and the stop distance down before you follow anything.