Investments can bring both profit and loss. However, for ordinary retail investors, staying up late to monitor the market in order to generate profits may not be a habit that everyone can maintain. In order to bridge the gap between investment professionals and retail investors, many companies have introduced tools such as “social copy trading systems” in recent years.
In the design of these copy trading systems, elite traders act as the driving force behind the funds, increasing the utilization of funds for retail investors who lack experience and time. This efficient tool allows them to have a forward-looking and direct participation in the market. Some investors rely on automatically copying orders from experienced traders and rely on the research results of others to help them make profits.
Taking the famous exchange Bitget as an example, it has currently attracted hundreds of thousands of users for its copy trading feature. This has also created a competition among the traders who are being followed, resulting in a highly competitive environment. How do these top-ranked star traders achieve their success?
To understand the principles and risks of copy trading, let’s take a closer look.
Copy trading is a popular feature in the cryptocurrency market, with Bitget exchange being one of the representative platforms. This product has been in operation for 3 years and is widely used by the trading community. After registering and opening the official website or app, users can easily copy trades with just one click. They can choose from a list of traders to follow and automatically synchronize their trading behavior without the need for manual opening or closing of positions. This allows them to potentially make profits without having to monitor the market.
Bitget’s copy trading feature is based on a user-friendly infrastructure, providing users with a clear overview of their positions through a profit and loss dashboard. Users can easily filter traders based on their ROI, maximum drawdown, total number of followers, total earnings, win rate, and AUM. Bitget also automatically provides various tags to help users discern the trading style of each trader.
However, copy trading has its risks and there are certain points that users need to pay attention to before using this feature. It is recommended to be cautious of traders who have extremely high profits but short order opening times, as they may rely on high leverage with small funds. It is also important to pay attention to the “total follower earnings” to filter out traders who have high profits but have caused their followers to be liquidated. Users should also establish their own risk controls, such as setting leverage limits, stop-loss and take-profit ratios, and the maximum amount to follow a single trader. Additionally, traders can extract a percentage of the followers’ profits (0-13%) as an incentive, so followers should be aware that their earnings may be partially deducted.
While analyzing the data of Bitget’s copy trading feature, it is evident that the demand for copy trading has rapidly increased, reflecting the success and popularity of this feature on the platform. From January 1st to October 31st, there has been an increase of nearly 240,000 users who have followed contracts, bringing the total number of users to 617,000. In terms of spot copy trading, there has been an increase of 53,000 users from January 10th to October 31st. It can be observed that users prefer contract trading.
Bitget supports a wide range of cryptocurrencies for copy trading, with 208 different coins available for contract copy trading, accounting for 84.9% of the total listed contract trading pairs.
To become a top-ranked trader on Bitget, one must have a solid trading record. The platform uses six main data dimensions to rank traders: ROI, maximum drawdown, total number of followers, total earnings, win rate, and AUM. There are also additional auxiliary data such as total equity, total number of trades, days since joining, and current number of followers. Based on these data, Bitget categorizes top-performing traders into four types: highest ROI, highest earnings, highest follower earnings, and emerging trading experts. The emerging trading experts category provides opportunities for new traders to gain exposure, with specific criteria such as contract account balance ≥500 USDT, ROI ≥10%, total number of trades in the past 7 days ≥10, total number of followers in the past 7 days ≥1, and total earnings in the past 7 days ≥40 USDT. However, it is still challenging to make it to the emerging trading experts category due to the fierce competition among traders.
Bitget’s copy trading system also includes a “compare traders” feature, which allows users to compare different traders using more data. In addition to the aforementioned data comparisons, this feature also provides access to traders’ public posts, allowing users to gain insights into their market judgments.
For inexperienced investors who are new to trading, it is recommended to focus on four important indicators of traders on Bitget’s copy trading system. These indicators include historical performance, trading style, trader level, and trading cycle. By carefully considering these indicators, users can find the most suitable star traders to follow.
Analyzing the data of the top-ranked traders on Bitget, it can be seen that they frequently trade BTC, ETH, and XRP in the contract market. In the spot market, the most frequently traded coins by the top-ranked traders are BTC, ETH, and Bitget’s native token BGB.
In conclusion, copy trading is a powerful tool for social investors. It allows retail investors to learn from experienced traders and gain insights into the market. It also provides an opportunity for elite traders to increase their market influence and gain reputation and profits. Bitget’s trading interface provides comprehensive data, saving users a significant amount of time for analysis and enabling them to make more agile and flexible investment decisions. In the rapidly changing cryptocurrency market, copy trading is indeed a rare and powerful tool.
Risk Disclosure: The data used in this article is provided by Bitget. Copy trading carries different risks depending on the actions of the traders. This article does not provide any investment advice or recommendations. Readers should conduct their own research and exercise caution.
