Many people are confused about choosing between PMS based copy trading or Master-Child based copy trading.
Generally, we STRONGLY recommend “PMS” based copy trading for “manual traders”. This is because master-child copy (by it’s design has a lot of limitation); regardless whether you use our system or any other provider who is giving master-child copy.
Master-child copying is perfect for copying orders coming from an ALGO.
All features are in same package, so we do not get any benefit by recommending you PMS. We only do it because we understand the pros & cons, many “Manual” traders later regret using master-child.
However, there is no hard and fast rule. Depending on your requirement, you may decide to choose either one or both of them together.
By Admin
The primary reasons we DO NOT recommend master-child for manual traders are:
- Master-child allows you to trade from broker’s terminal directly. So over a period of time, we have seen that traders simply do not login to our system to monitor error notifications (if any). If there is a failure in copying order in child account, then a trader will likely miss it as he is not monitoring. PMS copy displays order copy errors instantaneously.
- Order modification is not copied in master-child. However, PMS copy does allow you to modify orders in bulk.
- Ideally a portfolio manager should “monitor all of his accounts” while trading. But with master-child he’s mostly focused on one master a/c. He’s likely to miss any issues that may happen in child accounts.
- Master-child is more error prone as explained point 5 below
Here we try to clarify this question & point out the differences between the two.
Comparison
- Availability
- All of our features are available under a single plan. So both of these methods of copy trading are available to you under your current plan
- Definition
- PMS is a complete end-to-end trading platform for handling multi-broker, multi-accounts. This involves monitoring, order copying, modification, cancellation, square-off etc.
- Master-child is just an additional feature in PMS. It also does the order copying but in the background
- Use cases
- PMS is the best option for manual traders
- Master-child can be used under following circumstances
- If you have an algo running in a master account & you want to copy the orders in child accounts
- If you are a manual trader, you can use broker’s terminal for analysis & place orders in our system by keeping it open in a separate browser tab. Our system can also be used on mobile browser. But if you still prefer placing orders directly on the broker’s terminal for some reason, then you should use master-child copying.
- Order Copying (Major Difference)
- In PMS, you enter an order only once for copying into many accounts. But this order needs to be entered into “our” trading platform.
- When placing the order, you specify the accounts or groups that you want the order to be copied to
- In Master-child, you also enter an order only once for copying into many accounts. However, this order can be entered in “our” system or on the “broker’s” system (if your broker allows parallel login).
- You create a master account & assign child accounts to it. This is a one time activity.
- While placing the order, you only trade in the master account
- In PMS, you enter an order only once for copying into many accounts. But this order needs to be entered into “our” trading platform.
- Bracket & Cover orders
- PMS supports copying of Bracket & Cover orders
- Master-child does not fully support BO & CO. This is because master-child multiple legs (entry, target & stoploss) as separate orders. They will be cancelled separately & have no relationship with each other. Hence, we do not recommend using BO & CO with master-child copy
- Issues
- Likelihood of issues in PMS is less as user is shown all the results & he enters all order details in our system
- Master-child on the other hand can have more issues due to following:
- Pause/resume: If user pauses copying in master-child & then resumes it later on. The system uses order-update-time given by the broker to decide whether the order was placed when copying was on or off. Any wrong time value given by your broker may result in orders being copied which were placed when copying was disabled.
- Order data: Master-child always reads order details from broker. Sometimes, depending on broker’s system design they can return different values for order than what was placed by user…this results in incorrect order copy. Although this is rare, but here’s an example:
- If you place a stoploss order in master account & it immediately got executed. Some brokers show it as limit order. So any copying system will copy that order as Limit order, because when it sees the order (it’s order type is LIMIT).
- Operations
- PMS supports all operations (place, modify, cancel, square-off)
- Master-child only supports copying of order placements & cancellations. Order modification copying is not supported as of now
- Speed
- PMS has fastest execution (almost no lag)
- Master-child can have a lag as our system has to wait for the new order notification coming from your stock broker
- Execution mode
- PMS runs in foreground
- Any errors are instantaneously reported to the user, so he can take corrective actions
- Master-child runs in background
- User needs to carefully monitor the notifications in our system to look for any errors. A manual trader who is generally trading in master-account on broker terminal, completely forgets to monitor child accounts & error notifications in our system (which can result in losses). Monitoring two systems simultaneously is challenging; hence we do not recommend this for manual traders.
- PMS runs in foreground
- Monitoring
- PMS allows you to monitor all trading accounts from a single dashboard
- Master-child users can also use PMS for monitoring
- Stability
- Both methods use same execution platform, so they are equally stable
- Tech Support
- PMS support (assistance) is available on both Whatsapp & Email
- Master-child support (assistance) is available on Email only
- Verdict
- PMS Copy is generally recommended for manual traders as you can quickly take actions if there is any error
- Master-child involves much less headache as you or your algo can trade in only one account & that too directly on your broker’s platform. However, you do have a chance of missing errors, if you do not monitor the error notifications.
- Note
- You can use both modes together for monitoring.
- However, do NOT use both modes together for order copying. This will result in double order copying in child accounts.
Still confused?
Click on the links below to read more about each method.
Or you can always call us & we will help you understand what method suits you the best.