Been copy trading for around 8 months, tracking various traders’ performances.
I’ve seen that the successful ones tend to keep their max drawdown under 20%. Those that exceed it often face big losses.
Do you all follow a similar guideline when choosing traders to copy?
20% drawdown works as a filter, but I dig way deeper than just that number.
How’d they hit that drawdown? One brutal losing streak or slow bleed? Traders who consistently bounce back from 5-8% dips are way more reliable than someone who hit 19% once and got lucky.
Recovery time matters too. Good traders get back to breakeven in 2-3 weeks tops. If they’re stuck in drawdown for months, that’s a massive red flag no matter the percentage.
Here’s what burned me early - traders game their stats by closing accounts after big losses and starting fresh. Always check how long they’ve actually been trading on that account.
I just avoid traders who hit 15% at all.
Your 20% rule works, but timing beats the actual percentage.
I copied a trader who hit 19% drawdown twice in six months. First time? He bounced back in three weeks with smaller positions. Second time took two months because he kept forcing bad trades.
Guess which one burned me?
Now I watch how they handle drawdowns. Still following their usual patterns and not revenge trading? I’ll stick with them at 18-19%. But if they start taking weird setups or doubling down, I’m out at 10%.
Check their equity curve too. Smooth recovery = good. Wild swings up and down = they’re gambling their way back.
I stick to 15% max. Anything higher makes me nervous even if they recover well.
Drawdown percentage doesn’t tell the whole story. You need to see how many trades it took to get there. If someone’s at 18% after 200 small losses, their win rate sucks. But if they hit 18% from just 3-4 bad trades, that’s probably just bad luck with market timing. Also check their position sizing. Traders risking 2-3% per trade can bounce back from drawdowns. Risk 10% per position and you’ll eventually blow up, no matter what your current stats look like.
I cap my drawdown at 12%. Drawdown reveals how traders handle pressure.
Hit 15-20% down? Most traders panic and make emotional moves trying to recover. That’s when losses snowball.
I also watch their trade size during drawdowns. Smart traders scale back their risk - they don’t double down.