Core Concepts

• Copy Trading: Automatically replicating another trader’s executed trades in your own account.
• Mirror Trading: Synonymous with copy trading—your account “mirrors” theirs trade for trade.
• Social Trading: Sharing ideas, charts and performance live on a platform; you can manually follow what others do.
• Signal: A specific trade recommendation (entry, stop, target) shared by a provider.
• Signal Provider: An experienced trader who publishes signals or allows others to copy their trades.
• Follower: A user who subscribes to a provider’s signals or strategy to automate or manually copy trades.

Roles & Platforms

• Platform: The service or exchange offering copy/social trading (e.g., eToro, ZuluTrade, Covesting).
• Provider Rating: A score or grade based on historical performance, risk and follower reviews.
• AUM (Assets Under Management): Total capital followers have allocated to a provider’s strategy.
• Subscription Fee: A recurring charge followers pay to access a provider’s signals.
• Performance Fee: A percentage cut the provider takes from the follower’s profits.

Performance Metrics

• ROI (Return on Investment): Total percentage gain or loss generated by the provider over a period.
• Drawdown: The largest peak-to-trough decline in a provider’s equity curve—measures risk.
• Win Rate: Percentage of profitable trades out of the total trades executed by the provider.
• Risk-Adjusted Return: Metrics (e.g., Sharpe Ratio) that factor volatility into returns.
• Correlation: Degree to which a provider’s strategy moves in line with broader markets or other providers.

Strategy & Configuration

• Allocation (% Copy Ratio): Portion of your own capital you assign to copying a provider (e.g., 50% copy of each trade).
• Max Concurrent Trades: Limit on how many of a provider’s open positions you’ll copy at once.
• Minimum Copy Size: Smallest trade size you allow the system to open for you.
• Stop-Out Level: Predefined equity percentage at which copy trading will automatically stop copying new trades to protect your capital.
• Auto-Adjust: Feature that scales trade sizes based on your changing account balance.

️ Execution & Mechanics

• Order Synchronization: How quickly and accurately your account replicates the provider’s order (market, limit, stop).
• Latency Impact: Delay between provider execution and follower execution—can affect fill price and slippage.
• Partial Fills: Situations where only part of the provider’s order volume is executed for you.
• Requote: When the follower’s order is filled at a different price because market moved in between.

️ Risks & Considerations

• Counterparty Risk: The danger a provider may behave poorly or the platform may malfunction, impacting your trades.
• Overreliance: Blindly following a provider without understanding their strategy or current market context.
• Past Performance ≠ Future Results: Reminder that historical success does not guarantee future profits.
• Slippage: Difference between expected copy price and actual fill, especially in illiquid markets.
• Platform Fees: All-in costs including trading fees, subscription, withdrawal and performance fees.

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