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Copy Trading AMA: On Your Way Up To The Top In Trading！
2022-12-16, 07:01
Host: Today we are very honored to have xxx here, the manager of copy trading, to share with us the experience of copy trading！Welcome! Let's give it up for her.
Guest: Hello, guys. Thanks for having me. I'm the manager of copy trading. I'm so glad to meet you here and discuss copy trading systems together. I hope all of you can learn something today.
Host: As a copy trading manager, what do you think is the core of copy trading? Or to put it another way, could you tell me a little about the product? Maybe a lot of new friends here don't know much about it.
Guest: Actually, users who have used Strategy Bot should be able to apprehend this product more easily. Simply put, copy trading is a trading auxiliary tool. Through this tool, the copier can synchronously copy the lead trader's operation behavior on contracts, who can get a small part of the copier's return as his leading remuneration, that is, profit sharing. In a strategy bot, the copier copies the signaler's strategy, while in copy trading, the copier copies the trading behavior of a real person. Therefore, there are two roles in copy trading: lead trader and copier. The two concepts exist only in the copy trading platform. Without copy trading, all users have the same identity: that is, an investor. For example, investor A has been trading alone before, whose performance is not good. Through copy trading, he found a like-minded investor B who is in tune with his own style and has stronger ability than himself. Investor A then followed investor B to trade simultaneously and achieved good returns. As a reward for leading him to trade, B can obtain a small part of investor A's returns. In the process, investor A is the copier while investor B is the lead trader, and the remuneration received by B is profit sharing.
Host: That's a pretty clear introduction! What do you think are the advantages of gate.io copy trading? Why should we choose it?
Guest: First of all, copy trading is a win-win platform for the copier and the lead trader. The copiers copy the trading behavior of the lead trader and the lead trader can get a 2%-30% profit sharing from the copiers.
In addition, when designing the copy trading system, we have fully considered the complexity of contract trading. So we reduced the threshold for contract trading as much as possible. Even novice or primary contract users can easily use it.
Secondly, copy trading is also a time-saving tool. Because after the user chooses one-click copying, there is no need to manually open and close positions. Also, copiers don't have to monitor the market, but can easily make profits. Using the current Internet buzzword to describe it: you can win in a walk.
Also, I think copy trading is a humanized and personalized trading AIDS. Why I say so? Because copy trading has designed two copying modes for users. One is the auto-copy mode, if the user chooses this mode, it means that all his parameter settings, such as leverage, copying multiplier and other indicators are consistent with those of the lead trader. The advantage of this mode is that copiers may gain a ROI quite close to that of the lead trader. The disadvantage is that you have no control over the operation. The other is called customized copy mode. If users choose this mode, they can customize their own copying parameters, and can also stop profit and loss at any time. It is more personalized. But the biggest drawback is that the users' ROI will be very different from that of the lead trader.
Host: Thanks for your explanation. I believe everyone has got it. So how do we choose a lead trader? I believe this is also a problem that bothers many investors. You know, when users open the copy trading homepage, there are so many excellent lead traders. It is really dazzling!
Guest: In fact, you will see a profit ranking list after entering our copy trading page. A lot of users will choose the one in first place in the profit ranking list. Of course, the ROI is a very important indicator, but it is not comprehensive, because it only shows the performance of the lead trader in the last week or month, which is a past result. And what you want is to have good results in the future. What should you do then? You need to use three indicators: Sharpe ratio, max drawdown and winning rate. These three indicators are the key factors to determine the relationship between the risk and return of the lead trader, and then combine his ROI to make a comprehensive evaluation.
Host:How should we use the three indicators in practice?
We just said that it is not enough to only look at his ROI when choosing a lead trader. If you want to have a more accurate and comprehensive judgment, you also need to use the three indicators. First of all, the Sharpe ratio can be simply understood as a technical parameter, and it has a calculation formula: average ROI/standard deviation of ROI, which represents the return corresponding to the unit risk. The larger the Sharp Ratio, the higher the return corresponding to the unit risk, the more appropriate relationship between the risk and return for the lead trader, which means he/she has relatively stronger profitability. So Sharpe Ratio can be used to measure the relationship between the return and risk of the lead trader.
Let’s talk about the max drawdown. It means the range of the net value of the product falling from the highest point to the lowest point within a certain period of time. The larger the max drawdown, the more the funds of the lead trader will fall, and it's more likely to lose money when buying at a high point. Usually, the max draw down is directly proportional to the risk. The smaller the max drawdown, the stronger the ability to control risk, and the larger the drawdown, the harder it is to pay for itself.
Then let's talk about the winning rate, which refers to the number of profitable transactions/total number of transactions within a period of time. The winning rate of a lead trader will affect his/her profit and loss to a certain extent, but it is not absolute. For example, if a lead trader has a total of 200 transactions, with 150 times profits and 50 times losses, then his winning rate = 150/200x100%=75%, which is relatively high. But if the 150 profitable transactions brought a total profit of $15,000, while the 50 times losses caused a total loss of $50,000, then the lead trader is at a loss in the whole. Therefore, at this time, it is necessary to make a judgment based on his yield curve.
Host: It is true that the yield curve is the most intuitive reference. I think most users, such as me, judge the profitability of a lead trader through the yield curve. But I just have a superficial judgement cause I only observe the highest point, the lowest point and the fluctuation. xxx, what information do you usually read? Can you show us a demo?
Guest: Okay, I will use a yield curve chart to demonstrate. When we look at the yield curve, we can see that it is like an electrocardiogram, continuously rising and falling. You can see there will be a highest point and a lowest point within a period of time.
Let's take this yield curve of a certain lead trader as an example. The ROI peak value in the figure represents the trader's potential ability, and the peak and valley value of ROI reflect the trader's leading stability. On the whole, the lead trader is relatively stable and reliable in leading whose ROI is overall surging. There will also be intermittent, small decline in ROI, but he makes good control of the stop loss, and losses of deposit rarely occur, indicating that the lead trader has enough means to deal with the volatile market situation. You can consider following him.
Host: The guest just showed us what the Sharpe Ratio is, and now let's take a quiz about the Sharpe Ratio! The three audiences who give the correct answer first will get a reward of 10 USDT each! Act now!
If the average ROI of lead trader A is 10%, the risk is 20%, but the average ROI of lead trader B is 20%, and the risk is 50%. How to objectively evaluate who has a more reasonable relationship between risk and ROI? Try calculating it now.
Host:According to the Sharpe ratio's calculation formula= the lead trader's average ROI /lead trader's ROI standard deviation (the larger the ROI standard deviation, the higher the risk). Let's convert the relationship between risk and ROI into Sharpe ratio. The Sharp ratio of lead trader A = 10% / 20% = 0.5, and the Sharpe ratio of lead trader B = 20% / 50% = 0.25. Obviously, lead trader A has a better relationship of return versus risk, therefore, A has a stronger profitability.
Host: Thank you for your detailed explanation, and for giving us many examples to help us understand. Then, as the new darling of the industry, what is your future development plan for copy trading? Can you give us a spoiler?
Guest: Regarding this question, I think it is necessary to tell you about the current situation of the industry. At present, copy trading is not a universal product, because many platforms have not developed this function, and Gate.io is one of the few leading exchanges that have this product. So it's a new thing for everyone.
There is a saying in philosophy that the development of new things advances in twists and turns and spirals upwards. So we will definitely encounter many problems at the beginning, and users will also feedback on many problems to us during their use process. We will also improve step by step according to their feedback. For example, we have updated many functions recently: we added the function that the lead trader can set the minimum copying amount last week. We will always strive to improve and innovate to bring users a better experience.
Host: You are really a master in the crypto industry! Next, we will announce the winners of the Sharpe ratio quiz. The first three users who answered the Sharpe ratio concept correctly are:,,,. Please contact the customer service of copy trading and provide your UID. We will send 10 USDT contract trial funds to your contract account within three working days. Please check your account timely!
How time flies! Learning makes us happy. The interview is coming to an end before we know that. In the end, what do you want to share with us?
Guest: Finally, I want to say that investing is a long-term business. Copy trading provides ordinary users with insufficient trading experience with a shortcut to connect with high-quality traders, but it is still a long-term investment, so the copiers should also have a long-term vision to measure profit and loss. When you have the idea of abandoning copying, you can compare the weekly copying income with the monthly copying income in the historical copying data, and do not take short-term profit and loss as the only criterion for evaluating the trader's ability to lead trading.
Host: We have a deeper understanding of copy trading and investment philosophy. Thank you again for your participation, and we look forward to the next time xxx will be a guest in our AMA live room again. Because the copy trading system is complex, and it cannot be explained clearly in one interview, we will hold more related activities in the future to lead you to explore the secrets of copy trading. That's all for today's AMA, see you next time!
Guest: Thank you very much for your time, please continue to support Gate.io copy trading! goodbye!
Guest: Hello, guys. Thanks for having me. I'm the manager of copy trading. I'm so glad to meet you here and discuss copy trading systems together. I hope all of you can learn something today.
Host: As a copy trading manager, what do you think is the core of copy trading? Or to put it another way, could you tell me a little about the product? Maybe a lot of new friends here don't know much about it.
Guest: Actually, users who have used Strategy Bot should be able to apprehend this product more easily. Simply put, copy trading is a trading auxiliary tool. Through this tool, the copier can synchronously copy the lead trader's operation behavior on contracts, who can get a small part of the copier's return as his leading remuneration, that is, profit sharing. In a strategy bot, the copier copies the signaler's strategy, while in copy trading, the copier copies the trading behavior of a real person. Therefore, there are two roles in copy trading: lead trader and copier. The two concepts exist only in the copy trading platform. Without copy trading, all users have the same identity: that is, an investor. For example, investor A has been trading alone before, whose performance is not good. Through copy trading, he found a like-minded investor B who is in tune with his own style and has stronger ability than himself. Investor A then followed investor B to trade simultaneously and achieved good returns. As a reward for leading him to trade, B can obtain a small part of investor A's returns. In the process, investor A is the copier while investor B is the lead trader, and the remuneration received by B is profit sharing.
Host: That's a pretty clear introduction! What do you think are the advantages of gate.io copy trading? Why should we choose it?
Guest: First of all, copy trading is a win-win platform for the copier and the lead trader. The copiers copy the trading behavior of the lead trader and the lead trader can get a 2%-30% profit sharing from the copiers.
In addition, when designing the copy trading system, we have fully considered the complexity of contract trading. So we reduced the threshold for contract trading as much as possible. Even novice or primary contract users can easily use it.
Secondly, copy trading is also a time-saving tool. Because after the user chooses one-click copying, there is no need to manually open and close positions. Also, copiers don't have to monitor the market, but can easily make profits. Using the current Internet buzzword to describe it: you can win in a walk.
Also, I think copy trading is a humanized and personalized trading AIDS. Why I say so? Because copy trading has designed two copying modes for users. One is the auto-copy mode, if the user chooses this mode, it means that all his parameter settings, such as leverage, copying multiplier and other indicators are consistent with those of the lead trader. The advantage of this mode is that copiers may gain a ROI quite close to that of the lead trader. The disadvantage is that you have no control over the operation. The other is called customized copy mode. If users choose this mode, they can customize their own copying parameters, and can also stop profit and loss at any time. It is more personalized. But the biggest drawback is that the users' ROI will be very different from that of the lead trader.
Host: Thanks for your explanation. I believe everyone has got it. So how do we choose a lead trader? I believe this is also a problem that bothers many investors. You know, when users open the copy trading homepage, there are so many excellent lead traders. It is really dazzling!
Guest: In fact, you will see a profit ranking list after entering our copy trading page. A lot of users will choose the one in first place in the profit ranking list. Of course, the ROI is a very important indicator, but it is not comprehensive, because it only shows the performance of the lead trader in the last week or month, which is a past result. And what you want is to have good results in the future. What should you do then? You need to use three indicators: Sharpe ratio, max drawdown and winning rate. These three indicators are the key factors to determine the relationship between the risk and return of the lead trader, and then combine his ROI to make a comprehensive evaluation.
Host:How should we use the three indicators in practice?
We just said that it is not enough to only look at his ROI when choosing a lead trader. If you want to have a more accurate and comprehensive judgment, you also need to use the three indicators. First of all, the Sharpe ratio can be simply understood as a technical parameter, and it has a calculation formula: average ROI/standard deviation of ROI, which represents the return corresponding to the unit risk. The larger the Sharp Ratio, the higher the return corresponding to the unit risk, the more appropriate relationship between the risk and return for the lead trader, which means he/she has relatively stronger profitability. So Sharpe Ratio can be used to measure the relationship between the return and risk of the lead trader.
Let’s talk about the max drawdown. It means the range of the net value of the product falling from the highest point to the lowest point within a certain period of time. The larger the max drawdown, the more the funds of the lead trader will fall, and it's more likely to lose money when buying at a high point. Usually, the max draw down is directly proportional to the risk. The smaller the max drawdown, the stronger the ability to control risk, and the larger the drawdown, the harder it is to pay for itself.
Then let's talk about the winning rate, which refers to the number of profitable transactions/total number of transactions within a period of time. The winning rate of a lead trader will affect his/her profit and loss to a certain extent, but it is not absolute. For example, if a lead trader has a total of 200 transactions, with 150 times profits and 50 times losses, then his winning rate = 150/200x100%=75%, which is relatively high. But if the 150 profitable transactions brought a total profit of $15,000, while the 50 times losses caused a total loss of $50,000, then the lead trader is at a loss in the whole. Therefore, at this time, it is necessary to make a judgment based on his yield curve.
Host: It is true that the yield curve is the most intuitive reference. I think most users, such as me, judge the profitability of a lead trader through the yield curve. But I just have a superficial judgement cause I only observe the highest point, the lowest point and the fluctuation. xxx, what information do you usually read? Can you show us a demo?
Guest: Okay, I will use a yield curve chart to demonstrate. When we look at the yield curve, we can see that it is like an electrocardiogram, continuously rising and falling. You can see there will be a highest point and a lowest point within a period of time.
Let's take this yield curve of a certain lead trader as an example. The ROI peak value in the figure represents the trader's potential ability, and the peak and valley value of ROI reflect the trader's leading stability. On the whole, the lead trader is relatively stable and reliable in leading whose ROI is overall surging. There will also be intermittent, small decline in ROI, but he makes good control of the stop loss, and losses of deposit rarely occur, indicating that the lead trader has enough means to deal with the volatile market situation. You can consider following him.
Host: The guest just showed us what the Sharpe Ratio is, and now let's take a quiz about the Sharpe Ratio! The three audiences who give the correct answer first will get a reward of 10 USDT each! Act now!
If the average ROI of lead trader A is 10%, the risk is 20%, but the average ROI of lead trader B is 20%, and the risk is 50%. How to objectively evaluate who has a more reasonable relationship between risk and ROI? Try calculating it now.
Host:According to the Sharpe ratio's calculation formula= the lead trader's average ROI /lead trader's ROI standard deviation (the larger the ROI standard deviation, the higher the risk). Let's convert the relationship between risk and ROI into Sharpe ratio. The Sharp ratio of lead trader A = 10% / 20% = 0.5, and the Sharpe ratio of lead trader B = 20% / 50% = 0.25. Obviously, lead trader A has a better relationship of return versus risk, therefore, A has a stronger profitability.
Host: Thank you for your detailed explanation, and for giving us many examples to help us understand. Then, as the new darling of the industry, what is your future development plan for copy trading? Can you give us a spoiler?
Guest: Regarding this question, I think it is necessary to tell you about the current situation of the industry. At present, copy trading is not a universal product, because many platforms have not developed this function, and Gate.io is one of the few leading exchanges that have this product. So it's a new thing for everyone.
There is a saying in philosophy that the development of new things advances in twists and turns and spirals upwards. So we will definitely encounter many problems at the beginning, and users will also feedback on many problems to us during their use process. We will also improve step by step according to their feedback. For example, we have updated many functions recently: we added the function that the lead trader can set the minimum copying amount last week. We will always strive to improve and innovate to bring users a better experience.
Host: You are really a master in the crypto industry! Next, we will announce the winners of the Sharpe ratio quiz. The first three users who answered the Sharpe ratio concept correctly are:,,,. Please contact the customer service of copy trading and provide your UID. We will send 10 USDT contract trial funds to your contract account within three working days. Please check your account timely!
How time flies! Learning makes us happy. The interview is coming to an end before we know that. In the end, what do you want to share with us?
Guest: Finally, I want to say that investing is a long-term business. Copy trading provides ordinary users with insufficient trading experience with a shortcut to connect with high-quality traders, but it is still a long-term investment, so the copiers should also have a long-term vision to measure profit and loss. When you have the idea of abandoning copying, you can compare the weekly copying income with the monthly copying income in the historical copying data, and do not take short-term profit and loss as the only criterion for evaluating the trader's ability to lead trading.
Host: We have a deeper understanding of copy trading and investment philosophy. Thank you again for your participation, and we look forward to the next time xxx will be a guest in our AMA live room again. Because the copy trading system is complex, and it cannot be explained clearly in one interview, we will hold more related activities in the future to lead you to explore the secrets of copy trading. That's all for today's AMA, see you next time!
Guest: Thank you very much for your time, please continue to support Gate.io copy trading! goodbye!
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