Copy trading risks

Copy trading can save time and give access to experienced traders' decisions. It also copies their losses. Here's what to understand first.

1. Past results don't guarantee future results

A strong year can be followed by a bad one. Markets change, and strategies stop working.

2. Look at the drawdown, not only the return

A provider who made 80% with a 60% drawdown took far more risk than one who made 25% with a 6% drawdown. The drawdown shows what you'd have had to sit through.

3. Watch for hidden risk

• No stop losses or very wide ones.
• Averaging down (adding to losing trades), which looks smooth until it fails badly.
• Very high win rates with small wins and rare huge losses.
• Short histories: a few weeks of results say little.

4. Your size and your limits

Copy at a size you can afford, set a daily loss limit and an equity stop, and start small.

5. Costs

Spreads, commissions, swaps and profit-share fees all reduce your result.

6. Your money, your account

With a copier like Goldman Copier, money stays in your own broker account and you can stop copying at any time. How we keep accounts safe