Copy Trading Best Practices
Optimize your copy trading strategy with proven best practices for trader selection, risk management, and performance monitoring.
Trader Selection
Start Conservative: Choose traders with 5-15% monthly ROI, large accounts ($50k+), and consistent performance across all time windows.
Evaluate Multiple Metrics: Check all time windows, compare ROI and PnL, review account size and consistency.
Monitor First: Watch trader for 3-7 days before creating config to verify trading frequency, symbol preferences, and performance stability.
Diversify: Create configs for 2-3 traders, activate one at a time per DEX, and switch if performance declines.
Configuration Strategy
Position Sizing: Fixed amount ($50-$200) for beginners with predictable risk. Fixed ratio (5-10%) for experienced traders who want to scale with trader's conviction.
Leverage: Conservative (2x-5x) for beginners, moderate (5x-10x) for experienced. Avoid 10x+ for copy trading due to high liquidation risk.
Symbol Filtering: Use allowed symbols for major cryptos (BTC, ETH, SOL). Use excluded symbols to filter meme coins and volatile assets.
Trade Size Limits: Min $50-$100 to filter noise. Max 10-20% of capital to limit single trade exposure.
Risk Management
Capital Allocation: Start with 10-20% of total portfolio, never exceed 50%. Risk 1-2% per trade.
Balance Management: Keep 2-3x your fixed amount as buffer for multiple trades and fees. Avoid using over 70% of available margin.
Stop-Losses: Copy trading doesn't auto-set stop-losses. Manually set 3-5% stop-losses on copied positions and monitor daily.
Monitoring
Daily: Verify trades executing, check failed trades, monitor success rate (target above 80%), ensure sufficient balance.
Weekly: Compare executed vs skipped trades, verify filters work, check execution times (under 500ms average), evaluate trader performance.
Monthly: Calculate total PnL, compare with trader's performance, analyze slippage, adjust configuration as needed.
Common Mistakes
Over-Leveraging: Avoid 20x+ leverage. Use 2x-10x maximum.
Insufficient Balance: Maintain 3-5x your per-trade amount as buffer.
Ignoring Failed Trades: Review daily and fix issues.
No Monitoring: Check positions daily and set manual stop-losses.
Too Many Traders: Focus on 1-2 traders initially.
Unrealistic Expectations: Understand slippage, delays, and fees reduce returns.
Ignoring Market Conditions: Pause during extreme volatility.
Advanced Strategies
Multi-DEX Diversification: Copy different traders on Hyperliquid, Aster, and Lighter simultaneously.
Trader Rotation: Test 3-4 traders for 1-2 weeks each, keep the best performer.
Hybrid Approach: Use copy trading for 50% capital, manual trading for 50%.
Symbol-Specific: Copy different traders for specific assets (e.g., Trader A for BTC, Trader B for ETH).
Success Metrics
Target Success Rate: Above 80% executed trades (above 90% excellent, below 70% investigate)
Target Execution Time: Under 500ms average (under 1s good, over 2s check system)
Optimal Margin Utilization: 30-50% (under 20% underutilized, over 70% over-allocated)
PnL Comparison: Compare to trader's performance over 30+ days. Account for 1-3% slippage and fees.
Quick Start Guide
Beginners: One conservative trader, $50-$100 fixed amount, 2x-5x leverage, BTC/ETH only, monitor daily.
Intermediate: Test 2-3 traders, 5-10% fixed ratio, 5x-10x leverage, broader symbols, weekly reviews.
Advanced: Multi-DEX diversification, trader rotation, optimized sizing, custom filters.
Next Steps
Ready to optimize your copy trading?
- Overview - Review copy trading fundamentals
- Finding Traders - Discover new traders
- Configuration - Refine your settings
- Managing - Monitor your configurations
Support
Need help with copy trading strategy?
- Discord: discord.gg/Fz7aDWkp
- GitHub: github.com/b3x-ai