Q1. Basic Logic of Live Copy Trading
A:1. Copy Trading Logic
1.1. Copy trading operates based on the trader's position adjustment amount. The copy trading amount (rounded down) = copy ratio ✖️ position adjustment amount. If the amount is less than the minimum contract copy trading amount, no copy trade will be executed.
1.2. The follower's tradable amount is then calculated according to their available funds and the leverage multiplier set for the contract. If the copy trading amount ≤ follower's tradable amount, the copy trade is successful; otherwise, it fails.
1.3. Without considering copy trading multipliers, leverage systems, and single order constraints, the follower will replicate the leader's position changes until their copy trading funds are exhausted. When the leader reduces their position in the corresponding copy trading contract, the follower will have available funds accordingly.
1.4. The follower provides copy trading margin, which means the copy trader transfers funds from their spot account to a virtual sub-account used exclusively for copy trading. The sub-account only follows the trader's copy trades. After copying ends, the account is settled, and the remaining funds (after deducting profit sharing and trading fees) are transferred back to the spot account.
A:2. Example of Copy Trading Logic
Assuming no trading fees or funding rates:
The leader has a total of 1000U and uses 100U to buy contract A, with 100x leverage, building a position value of 100*100=10000U.
The copy trader has 100U available for copy trading, sets a copy multiplier of 0.1, and uses 20x leverage. In theory, the copy trader follows the above trade with a total copied position value of 10000*0.1=1000U. The required margin for copying is 1000/20=50U, so the follower's remaining available funds are 100-50=50U.
Next, the leader uses 200U to buy contract B, with 100x leverage, building a position value of 200*100=20000U.
The follower now has 50U of available funds, with 20x leverage, so the maximum position value they can build is 1000U. If they wish to continue following the leader's purchase of contract B, the copy trader can only build a 1000U position, exhausting all copy trading funds.
When the prices of both A and B coins rise by 10% and the leader closes the positions:
Leader's profit: (11000-10000) + (22000-20000) = 3000U;
Follower's profit: (1100-1000) + (1100-1000) = 200U.
A:3. Potential Issues with This Copy Trading Logic
Followers may notice their returns differ from those of the trader. Using different principal amounts, leverage multipliers, or copy trading multipliers can all cause discrepancies in profits between followers and traders. Followers should carefully set their copy trading parameters and choose traders with similar capital for copying.
For more on issues with copy trading logic, see: Q2.
Q2. Why Do Trader and Follower Return Rates Differ?
A:1. Differences in principal between leader and follower result in different return rates. If the follower's funds are insufficient, they can't follow the leader's subsequent trades.
Note: The current copy trading logic is that followers replicate the leader's position changes until their copy trading funds are depleted. If the leader's previous trades have already used up all the follower's funds, the follower cannot participate in subsequent trades.
A:2. If the leader already has a position in a contract before the follower starts copying and then increases the position after the follower begins copying, the follower and leader will have different costs for that contract, leading to different profits when closing the position.
A:3. If the follower sets a leverage multiplier in the copy trading parameters, this can cause differences in profits when positions are closed.
A:4. If the follower and leader use different leverage, currently, for risk control, the follower's contract maximum leverage is 20x, while some leader contracts allow up to 100x. This leverage mismatch can lead to differences in returns.
A:5. If the follower uses a copy multiplier, which means the follower copies the leader's position change by a set multiple (e.g., setting 10x, if the leader adds 10 contracts, the follower adds 10*10=100 contracts), the multiplier can be set from 0.01 to 100. It's recommended to set the multiplier based on the ratio between the follower's funds and the leader's funds. For example, if the leader's equity is 1000 USDT and the follower has 100 USDT, set the multiplier to 0.1 (100/1000). If the follower has 5000 USDT, set the multiplier to 5 (5000/1000=5).
Q3. How Can Followers Avoid Inconsistent Returns?
A:1. Followers should choose or use investment funds similar to those of the leader.
A:2. It's recommended to set the copy multiplier based on the ratio between the follower's funds and the leader's funds.
Q4. What Order Types Are Currently Supported for Followers?
A: Currently, only limit orders are supported. If the order is not filled, it fails.
Q5. If a Follower's Order Is Not Filled, How Long Is the Order Valid?
A: Currently, only limit orders are supported. If the order is not filled, it fails. Orders have no validity period.
Q6. How Is the Copy Ratio Determined?
A: Users can set it themselves or calculate it based on the available balance ratio.
Q7. Can Followers Manually Stop Copy Trading?
A: Currently, copy trading can only be stopped manually. However, once stopped, it ends the entire copy trading activity, not just a single copy trading order.
Q8. Can Followers Copy the Leader's Stop Loss Orders?
A: Stop loss orders are not copied. Followers must set their own take profit and stop loss ratios.
Q9. How Is the Copy Trading Profit Displayed on the Follower's Page Calculated? Why Doesn't It Match the Sum of Individual Copy Trading Profits?
A: Follower's copy trading profit = historical profit - fees deducted from current positions - profit sharing.
A: Historical profit equals the sum of each copy trading profit shown in the image above.
Note: Unrealized P&L displayed on the copy trading page is not included in copy trading profit.
Q10. Why Doesn't the Custom Leverage Set by the Follower Take Effect?
A: 1. Copy trading leverage is restricted by risk limit rules.
If the custom leverage set by the follower (e.g., 20x) does not take effect, it's because the leader's trade triggered the exchange's risk limit mechanism. According to copy trading rules, the follower's actual leverage cannot exceed the leader's available leverage for that trade.
A: 2. Explanation of the Risk Limit Mechanism
The exchange automatically matches the risk limit tier based on the leader's position value. The larger the position value, the higher the risk limit tier, and the lower the maximum allowed leverage (e.g., from 20x down to 3x). If the leader's maximum leverage is only 3x due to a large position, even if the follower sets a higher leverage, the system will automatically adjust it to 3x for copy trading.
Relevant links:
Q11. What Is Maximum Opening Slippage? How Do You Set It?
A:1. What Is Maximum Opening Slippage
Maximum opening slippage refers to the maximum price deviation allowed when a follower copies the leader's opening trade. The system will only execute the copy trade if the actual execution price does not exceed the slippage range you set compared to the leader's opening price.
A:2. Why Set Maximum Opening Slippage
Due to time delays in copy trading, the follower's actual execution price may differ from the leader's opening price. By setting maximum opening slippage, you can control the maximum acceptable price deviation during copy trading, ensuring the opening price is closer to the leader's actual opening price.
A:3. How to Set Maximum Opening Slippage
In the copy trading quick pop-up or parameter editing page, find the "Maximum Opening Slippage" option to set it:
- Default: Use the system-recommended slippage configuration;
- Custom: You can manually enter or drag the slider to set the range, from 0.1% to 3.0%.
A:4. Notes
The smaller the slippage setting, the closer the copy trade's opening price will be to the leader's opening price, but it may increase the risk of copy trading failure if the price exceeds the slippage range. The larger the slippage setting, the higher the success rate of copy trading, but the deviation between the actual execution price and the leader's opening price may also be greater. Please set it reasonably according to your personal preferences.
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