Profit-Sharing is our top method of automated trading, but how secure is it?
This is a very legitimate question to ask before investing any capital.
Let's review a few key points of Profit-Sharing & the layer of protection behind it
In this article:
Requires a Zignaly Exchange Account
You must have Zignaly Exchange account to connect to a profit-Sharing service.
A Zignaly Exchange account is actually a Binance account (behind the scenes).
From here you can manage all of your trading needs directly from Zignaly. This includes funding your account. Deposits into your Zignaly exchange account are under the high security of Binance.
Funds are pooled into a separate account
Profit-sharing differs from our regular Copytrading option.
Instead of your account opening trades seconds after the Copytrader, The trader and subscribers become one. This ensures the perfect execution of the trading strategy from entry to exit.
To do this, your funds are being pooled into a separate account along with the balance of the other investors. It then creates a base position allowing identical results for everyone participating.
It means both for the trader who manages the strategy and for the users who follow it own the same positions.
You will find that this balance is not displayed in the top Balance info box. Instead, you can view your allocated balance, and personal accounting for this profit-sharing service, in the dashboard analytics section.
When the trader opens a position with 1% of the capital, it takes 1% of the entire pool. This helps each user to use 1% of their funds regardless of the amount
This allows followers to have open positions under Binance trading rules.
If it is a single pool with all the capital, can't the trader take my funds?
The safety of our users is our top priority, so it was what we had solved first. A profit-sharing main service account is a sub-account. The trader only has trading permissions, he cannot touch the funds for other reasons. Therefore, the funds are completely safe.
The service provider does not have access to the pooled account.
They only have trading management over these coins.
This allows the service provider to manage the entire allocation as it fits with their specific strategy.
When you decide to disconnect from a profit-sharing service,
no new positions will open, but it requires you to wait until all current open positions have been closed by the service provider.
The balance will remain locked during this time.
What if the provider stops his service?
A service provider can stop their service whenever they would like. You will get a notification, and see an announcement posted in the traders "feed" section of their profile, requesting all users to start the disconnection process.
Once all positions are closed by the trader, users will be disconnected from the service, and your invested funds will be placed back into your exchange account.
If you have not seen the traders announcement, our team will send out a reminder for you to disconnect from the service.
We have implemented a few rules to filter out gamblers, scammers, and poorly performed traders. The following list will stop traders from hiding any bad results, and simply opening a new service. See the full list of requirements here.
There are many different types of trading strategies available on Zignaly. Make sure that you understand what kind of service you are connecting to and the risk involved.
Please note that past performance is not an indicator of future results.
It is a great idea to reach out to the service provider if you have any questions before investing.
For more information on Profit-Sharing: Understanding Profit-Sharing