Core Concept: The Three-Point Check

First Check: Profit Stability (30% Weight)

• Key Metrics: ROI + Max Drawdown
• ✅ Excellent Standards:
  • 30-Day ROI > 10%
  • Max Drawdown < 20%
  • Equity curve shows a steady upward trend
• ❌ Warning Signs:
  • Drawdown exceeds 35%
  • Equity curve has major fluctuations
  • Experiences sharp, short-term gains and losses
• Simple Test: Does the equity curve look like a "steady mountain climb" rather than a "rollercoaster"?

Second Check: Risk Management (40% Weight)

• Key Metrics: P&L Ratio + Win Rate Combination
• ✅ Healthy Combination:
  • P&L Ratio > 2.0 (Profits on winning trades are at least double the losses on losing trades)
  • Win Rate > 50% (More than half of all trades are profitable)
• ✅ Acceptable Combination:
  • High P&L Ratio (>3) + Moderate Win Rate (40-50%)
  • Moderate P&L Ratio (1.5-2) + High Win Rate (>65%)
• ❌ Dangerous Combination:
  • P&L Ratio < 1.5 AND Win Rate < 50%
• Simple Rule: The trader should either "win big" or "win often"—ideally both.

Third Check: Sound Trading Practices (30% Weight)

• Key Metrics: Trading Frequency + Asset Diversification
• ✅ Reasonable Range:
  • Average Daily Trades: 2-20 (Avoids over-trading, except for quant traders)
  • Top 3 Traded Assets: < 70% of total volume (Ensures investment is diversified)
  • Average Hold Time: > 1 hour (Avoids ultra-short-term gambling)
• ❌ Warning Signs:
  • Average Daily Trades > 20 (Potential over-trading)
  • Top 3 Traded Assets > 90% (Excessively concentrated risk)
  • Average Hold Time < 10 minutes (Resembles gambling)

Practical Scoring Table

Quick Scorecard (Total 100 Points)

Systematic Selection Process

Step 1: Preliminary Screening (30-Second Filter)

Go to the Trader List Page ↓ Sort by 30-Day ROI (Filter for > 8%) ↓ Check Max Drawdown (Exclude > 30%) ↓ Check Trading Days (Select > 30 days) ↓ Get a Shortlist of Candidates

Step 2: In-depth Analysis

For each candidate trader:

• Review the Equity Curve (1 minute)
  • Is the curve steadily rising?
  • Does it recover quickly after significant drawdowns?
  • Has recent performance been stable?
• Check Trader Metrics (1 minute)
  • Are there any obvious weaknesses?
  • Are the overall metrics balanced?
  • Are the risk metrics acceptable?
• Verify Data Authenticity (1 minute)
  • Is the number of copiers sufficient (>50)?
  • What is the percentage of profitable copiers (>60%)?
  • Is the profit-sharing data reasonable?

Step 3: Final Decision

Portfolio Allocation Suggestion:

• Core Trader (50% of capital): Score 80+, Drawdown <15%
• Supporting Trader 1 (25% of capital): Score 70+, complementary style
• Supporting Trader 2 (25% of capital): Score 70+, different asset preference

Risk Settings:

• Max Copy Amount per Trader: Do not exceed 30% of your total capital.
• Total Stop-Loss: Stop all copy trades if your account drawdown reaches 25%.
• Periodic Review: Check performance once a week.

Avoiding Pitfalls

Common Mistakes

• ❌ Looking only at ROI rankings: Short-term surges could be due to luck or high-risk trading.
• ❌ Ignoring drawdown metrics: High returns paired with high drawdowns are unsustainable.
• ❌ Blindly following popular traders: Popularity does not always equal quality.
• ❌ Frequently changing traders: Give excellent traders enough time to demonstrate their abilities.

Warning Signs

• 🚩 Max drawdown suddenly increases (e.g., jumps from 15% to 35%).
• 🚩 Trading style suddenly changes (e.g., from conservative to aggressive).
• 🚩 Win rate and P&L ratio decline simultaneously.
• 🚩 A significant drop in the number of copiers.
• 🚩 A recent losing streak of 7 consecutive days.

Practical Checklist

Pre-Copying Checklist:

• [ ] 30-Day ROI > 8%
• [ ] Max Drawdown < 25%
• [ ] P&L Ratio > 1.8
• [ ] Trading Days > 60
• [ ] Number of Copiers > 30
• [ ] You have set your personal stop-loss strategy.

Monitoring Checklist (During Copying):

• [ ] Check ROI changes weekly.
• [ ] Monitor if the drawdown is increasing.
• [ ] Observe changes in trading frequency.
• [ ] Compare performance with other copiers.

Explanation of Metrics

Core Metrics Explained

• ROI (Return on Investment)
  • Calculates the percentage return on your invested capital, accounting for all deposits and withdrawals.
  • Formula: (Final Equity + Total Withdrawals - Initial Investment - Total Deposits) / (Initial Investment + Total Deposits)
• Max Drawdown
  • The largest peak-to-trough decline the account has experienced. A smaller value indicates greater stability. A value under 30% is generally acceptable.
  • Reflects the trader's risk control under worst-case scenarios.
• P&L (Profit & Loss) Ratio
  • The ratio of the average profit on winning trades to the average loss on losing trades. A value >2 indicates good risk management.
  • Calculation: (Sum of all profits from winning trades) ÷ (Sum of all losses from losing trades)
• Win Rate
  • The percentage of profitable trades out of the total number of trades.
  • Note: A high win rate does not necessarily mean high profit; it must be assessed alongside the P&L ratio.
• Top 3 Assets Percentage
  • The percentage of total trading volume concentrated in the top 3 most-traded assets.
  • A lower value indicates more diversification, which typically means lower risk.
• NAV (Net Asset Value) Index
  • Reflects the trader's account performance, unaffected by deposits or withdrawals.
  • A value of 1.2 indicates a 20% growth from the initial value.

Risk Disclosure

⚠️ Important Disclaimer:

• Copy trading involves the risk of loss. Past performance is not indicative of future results.
• Please allocate your funds reasonably according to your own risk tolerance.
• It is recommended to diversify by copying multiple traders to avoid concentrated risk.
• Monitor your copy trading performance regularly and adjust your strategy as needed.