Copy trading is a popular choice among some investors in the cryptocurrency market, and thousands of traders lead the way in these orders. How do these top traders become successful? This article explores the core of the copy trading function, which is the data input into the exchange.
Table of Contents:
Principles of Profitable Copy Trading: Analysis of Advantages and Risks
Why is Copy Trading So Popular? Surprising Data
How are Star Traders Born on Bitget?
Comparing and Selecting the Top Traders for Copy Trading
a. Historical Performance
b. Trading Style
c. Trading Expert Level
d. Trading Period
Exploring the “Special Operations” of Star Traders: Taking the Contract Leader as an Example
Premium Copy Trading System Also Seeks Evolution
Conclusion: Copy Trading is a Powerful Tool for Social Investors
For many retail investors, staying up late to monitor the market in order to generate profits may not be a sustainable habit. To bridge the gap between professional investors and retail investors, many companies have introduced tools such as “social copy trading systems” in recent years.
In the design of copy trading systems, top elite traders act as the driving force behind the funds, increasing the utilization rate of funds for retail investors who lack experience and time. This is an efficient tool that allows for forward-looking and direct market participation. Some investors rely on automatically copying orders from experienced traders and use the research results of others to help them make profits.
Taking Bitget, an exchange famous for its copy trading function, as an example, it currently attracts hundreds of thousands of users for copy trading. The competition among these “leading” traders on Bitget’s platform is intense, and how do these top-ranked star traders become successful?
To understand the principle and risks of copy trading, it is representative to look at Bitget, a cryptocurrency exchange that has been operating its copy trading product for 3 years. Users can easily copy trades with just one click after registering on the website or app. They can choose any trader from the list of available traders to follow and automatically synchronize their trading behavior without the need for manual opening or closing of positions, enabling potential profits without the need to constantly monitor the market.
Bitget’s copy trading function has a user-friendly interface, providing a clear overview of the current opening status through the profit and loss dashboard. By opening the page of available traders to follow, users can quickly filter traders based on return on investment (ROI), maximum drawdown, number of followers, total earnings, winning rate, assets under management (AUM), and various other indicators provided by Bitget, allowing users to identify the trading style of a particular trader.
There are risks and considerations for users when using copy trading. Before using copy trading, it is recommended to pay special attention to the following points:
– Traders with extremely high profits in a short period of time may be using high leverage with a small amount of capital.
– Pay attention to the “total follower earnings” to filter out traders who have high profits from taking on excessive risks, but lead to followers getting liquidated.
– Set personal risk control measures in advance, such as setting leverage limits, profit-taking and stop-loss ratios, and the maximum amount to follow a single trader.
– To incentivize traders to provide orders, they can take a portion of the follower’s profits (0-13%), so followers should be aware that their earnings may be partially deducted.
Analyzing the data of Bitget’s copy trading system, we can see that the demand for copy trading has grown rapidly. Looking at the user changes within this year, from January 1st to October 31st, the number of users following contracts has increased by nearly 240,000, reaching 617,000 users. In terms of spot copy trading, from January 10th to October 31st, there has been an increase of 53,000 users, indicating a preference for contract trading.
In terms of the user source of contract copy trading, 48.28% come from Asia. For spot copy trading, Asia and Africa account for the largest proportion, totaling 42.87%.
Bitget supports a wide range of currencies for copy trading. There are 208 currencies available for contract copy trading, accounting for 84.9% of the total number of currencies available for trading.
Looking at the top-ranked traders on Bitget, we can analyze their data and see that they have achieved their success step by step through the number of trades. Currently, Bitget has over 120,000 trading experts (traders placing orders) on its copy trading platform, which is a significant number. To understand how the top performers are selected, we can refer to the publicly available data provided by Bitget. The selection is mainly based on six key dimensions:
– ROI
– Maximum drawdown
– Total number of followers
– Total earnings
– Winning rate
– AUM
In addition to the above data, auxiliary data is also used in the ranking, including total equity, total trades, number of days since joining, and current number of followers. Based on these data, Bitget classifies the top-performing traders into four types:
– Highest ROI
– Highest earnings
– Highest follower earnings
– Emerging trading experts
The ROI represents the investment return rate, usually expressed as a percentage per year. ROI = (Profit/Loss) / Capital x 100%. Total earnings refer to the total earnings from closed orders, while follower earnings represent the total earnings from followers’ closed orders.
Bitget also provides the “Compare Traders” feature in its copy trading system, which allows users to compare different traders using more data. In addition to the aforementioned data comparison, the system also provides the trader’s public posts, allowing users to understand their market judgments.
For inexperienced users who are new to investing, I recommend paying special attention to four important indicators of traders on the Bitget copy trading system:
a. Historical performance: To assess a trader’s long-term performance, users should focus on their performance and risk control abilities with different tokens, including trading frequency, ROI, winning rate, drawdown rate, total earnings, and other indicators. This can help determine if a trader relies on holding positions or speculative nature to beautify data.
b. Trading style: The Bitget copy trading system assigns style labels to traders based on their historical data, providing objective accuracy. Users can interpret the characteristics of different traders through these labels, which are quite diverse, including top labels (high earnings, high return rate, stable, consistent winners, most popular), style labels (high frequency, low frequency, aggressive, conservative, long-term, short-term), new trader labels (rising stars, newcomers), and preference for currencies labels (BTC enthusiasts, ETH enthusiasts, diverse experts). Negative labels such as “inactive” are also used.
c. Trading expert level: Traders on Bitget’s copy trading system are divided into six different levels (bronze, silver, gold, platinum, black gold, and legendary). The higher the level, the stricter the requirements for order data. For example, legendary trading experts need to maintain a win rate of ≥80%, a total of orders made in the past 30 days of ≥300, a total amount of orders followed in the past 30 days of ≥$50,000, a total profit in the past 30 days of ≥$2,000, and a total equity of the contract account in the past 7 days of ≥$10,000. The grading system allows followers to make evaluations to some extent.
d. Trading period: The trader’s personal page displays a time distribution chart, which can match the follower’s investment period, risk tolerance, and time habits, making it the most suitable star trader.
Looking at the top-ranked traders, it is evident that they mainly focus on BTC, ETH, and XRP when trading contracts. For spot trading, BTC, ETH, and Bitget’s native token BGB are the most frequently traded currencies.
Taking the current contract leader “Wilson-QF” as an example, their trading record shows that they only short BTC and ETH and use high leverage of 50x to quickly close positions in a very short time (around 10 minutes). This strategy is estimated to capture the selling pressure during specific periods using quantitative data. Despite the high-risk nature of these operations, many followers have profited from following this top-ranked trader.
To keep the copy trading system active, it is important to keep high-quality traders on the platform to continue generating profits. Bitget recognizes this and has recently launched the “Trading Expert Honor Mode,” which meets deeper needs. It consists of four key features:
– Whitelist Invitation: Trading experts can invite “specified users” to follow and pay attention to their strategies.
– Trading Strategy Protection: Only share trading strategies with followers in the honor mode.
– Profit-sharing Ratio Setting: Trading experts can flexibly set profit-sharing ratios from 0% to 99% without locking BGB tokens.
– Follower Customized Management: Trading experts can closely monitor the trading activities of their followers and add or remove followers.
This honor mode may seem familiar, as it follows a similar logic to the channel subscription and upgraded premium membership on well-known media platforms like YouTube. It enhances the interaction within the “content provider” and “demand side,” providing value-added content sharing and enhanced management tools for a win-win experience. Applying this logic to the copy trading system is still relatively rare but highly effective.
By analyzing the complete picture of Bitget’s copy trading function, it is clear that for any retail investor, studying how experienced contract traders operate in the current strong or popular currencies can provide a valuable source of trading data. Even if someone chooses not to follow others’ trades, they can still conduct extensive research on the drawdown data of successful traders.
On the other hand, experienced traders who have become elite traders can amplify their market influence and gain more social reputation and profits through the copy trading function. For investors who have a real need for copy trading, they naturally seek a powerful and intuitive interface. Bitget’s trader page already provides comprehensive data, saving a lot of personal analysis time and making investment decisions more agile and flexible. In the rapidly changing cryptocurrency market, this is indeed a rare and powerful tool.
Risk Disclosure: The data used in this article is provided by Bitget. Copy trading involves different risks depending on the trader’s operations. This article does not provide any investment or product usage recommendations. Readers should conduct their own research before making any decisions.