Investments involve risks and rewards, but for the average retail investor, staying up late to monitor the market in order to generate profits may not be a sustainable habit for everyone. In recent years, in order to bridge the gap between investment professionals and retail investors, many companies have introduced tools such as “social copy trading systems”.
In the design of copy trading systems, top elite traders act as the driving force behind the capital, increasing the utilization of funds for retail investors who lack experience and time, providing an efficient tool for proactive and direct market participation. Some investors rely on automatically copying orders from experienced traders and leveraging other people’s research results to help them make profits.
Taking the famous exchange Bitget as an example, it has currently attracted the copy trading demand of hundreds of thousands of users, forming a competition among the traders who lead the copy trading, creating a “cutthroat” competition. How are the top-ranking star traders cultivated in such a competitive environment?
Curious as we may be, we first need to analyze the principles and risks of copy trading.
Copy trading products in the cryptocurrency market are exemplified by the Bitget exchange, which has been in operation for 3 years and is widely used by the trading community. Users can easily open the website or app after registering to copy trades with a single click. They can choose from a list of traders to follow, automatically synchronize their trading behavior, and potentially make profits without the need to monitor the market.
The copy trading function of Bitget exchange has a convenient basic infrastructure, almost intuitive at a glance, with a profit and loss dashboard showing the current open position status. By opening the page of traders available for copy trading, users can quickly filter the trader’s ROI, maximum drawdown, total number of followers, total profit, win rate, AUM, and Bitget will automatically provide various identification labels to help users distinguish the trading style of the trader.
Copy trading has its risks and points that users need to pay attention to. Before using copy trading, it is recommended to pay special attention to the following points:
– Traders with very short order opening times and very high profits may be using high leverage with small capital.
– Pay attention to the “total follower profit” to filter out examples where traders make high profits by taking on high risks, but their followers end up liquidating their positions.
– Establish personal risk control measures by setting limits on leverage, profit-taking, stop-loss ratios, and the maximum amount to follow a single trader.
To incentivize traders to provide signals, they can earn a portion of their followers’ profits (0-13%), so followers should be aware that their profits may be subject to deductions.
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