Been copy trading for a few months now and still torn on this.
Some traders I follow are solid but their drawdowns make me nervous. Adding my own stops feels like I’m second-guessing their strategy, but trusting completely has burned me before.
What’s your approach here?
Copy small amounts first. Test their actual drawdowns yourself.
Used to overthink this until I found what works.
I copy traders who match my risk tolerance but set a 20% account-level stop. If my total balance drops 20% from its peak, I stop all copying and figure out what went wrong.
This way I don’t mess with individual trades but protect myself from total disasters. Had one trader go rogue and start revenge trading after a bad week. My stop saved me from losing everything.
I also track each trader separately. If someone consistently sucks or starts acting weird, I drop them even if my overall account looks fine.
It’s about finding that sweet spot - give strategies room to work without getting wiped out by someone having a meltdown.
Learned this the hard way copying a trader with great returns who’d let losing trades run forever. Lost 40% when he finally hit a bad streak.
Now I set my own max drawdown limit - usually 15% from peak. Let the trader handle trades, but if my account drops too much, I pause copying till they recover.
Find traders whose risk style matches yours. If you can’t handle 30% drawdowns, don’t copy someone who regularly pulls those numbers, even if they’re profitable long-term.
Some platforms let you set copy ratios. I copy at 50% sometimes so their 20% drawdown only hits me for 10%. Less profit but way better sleep.
Partial stops are good for longer trades. For scalpers, I just let them run their system. It all depends on the trader’s style.
Trust works both ways in copy trading. I find traders who handle risk like I want, then follow their plan completely.
Adding your own stops usually breaks their strategy - most systems need room to breathe. Can’t handle their drawdowns? You copied the wrong person.
Spend time upfront finding someone whose risk style matches yours.
You remain responsible for risk management in copy trading. Limit losses to 2-3% per trade at most. Monitor the trader’s recent performance. Good traders may dip 5-10% but bounce back quickly. Poor ones risk losing months of gains. Avoid using stop losses; instead, rely on position sizing where possible. If a trader is too aggressive, consider copying only smaller amounts. A trader risking 10% per trade feels safer if you copy at 30%.