The reason why the trader makes a profit while followers lose is that the average price of opening a position between the followers and the trader deviates.
For the same pair, if the trader adds the position and the follower can not follow the trader to add the position due to insufficient funds or other reasons, the average price will deviate between the followers and traders. If the trader closes the position within a small profit margin, the situation that trader earns profit but followers lose may happen.
FAQ
When the funds of a follower exceed 100,000 USDT, deviations between actual and expected following may occur due to risk limitations. The following are common issues related to high-capital following:
1. Follower's initial order exceeds risk limit:
Common Issue: Follower's initial order reaches the single-order maximum. The real follower-trader ratio becomes ineffective, and the system will place the order based on the maximum value of the follower's initial order and recalculate the following ratio. Definition of initial order: Same trading pair, same direction, trader's first position opening.
Example:
| Follower's Funds | 159,289 |
| Trader's Funds | 21,380 |
| Funds Ratio | 7.45 |
Trader's initial order: Long on BTCUSDT
| Opening Time | Opening Price | Number of Lots/Contracts at Opening | Opening Value |
| 8/9/2023 5:22 | 30162 | 4000 | 120648 |
Following value based on the ratio: 120,648 * 7.45 = 898,872.7442 ⚠️ Current maximum following position value per order for the follower: 500,000 USDT
Since 898,872.7442 > 500,000 The system places the order as 500,000 and recalculates the opening ratio = 500,000 / 120,648 = 4.14 Follower's actual initial following order: Long on BTCUSDT
| Opening Time | Opening Price | Number of Lots/Contracts at Opening | Opening Value |
| 8/9/2023 5:22 | 30149.5 | 16544 | 498793.328 |
Tips: Due to market fluctuations and other factors, a slippage of 0.2% in opening prices between the follower and the trader is within the normal range.
The actual ratio of 7.45 becomes ineffective, and subsequent trader position additions will follow the initial opening ratio of 4.14.
Trader adds to the position: Long on BTCUSDT
| Positioning Time | Opening Price | Number of Lots/Contracts at Opening | Opening Value |
| 8/9/2023 5:24 | 30134.5 | 500 | 15067.25 |
Follower follows the addition:
| Positioning Time | Opening Price | Number of Lots/Contracts at Opening | Opening Value |
| 8/9/2023 5:24 | 30134.5 | 2068 | 62318.146 |
The Minimum Order Size and Position Limit for Trader:
2. Triggering Risk Limit Assuming the trader has a capital of 10,000 USDT and the follower has a capital of 100,000 USDT. In this case, the follower is trading with a leverage of 10 times the trader's capital, meaning the trader opens positions worth 100 USDT, and the follower follows with positions worth 1,000 USDT.
Currently, on the BTCUSDT copy trading pair, the maximum single position value for the follower is 200,000 USDT.
When the trader opens a long position on BTCUSDT with a value of 30,000 USDT at a BTC price of 20,000 with 50x leverage, the trader's capital used is 600 USDT (30,000 / 50). According to the ratio, the follower should open a position worth 300,000 USDT (30,000 * 10), which exceeds the follower's maximum single position value of 200,000 USDT.
To execute the follower's order, the system will place an order for the follower based on their maximum single position value of 200,000 USDT. At this point, the follower's capital used for the position is 4,000 USDT, and the ratio of positions between the follower and the trader is 200,000 : 30,000 = 6.66.
The trader adds to their position again, this time with a value of 37,500 USDT on BTCUSDT. The trader's capital used for this addition is 750 USDT (37,500 / 50). The system will place an order for the follower to follow the ratio of 6.66. Therefore, the follower should add 250,000 USDT (37,500 * 6.66), and the follower's capital used for this addition is 5,000 USDT.
⚠️ Currently, on the BTCUSDT copy trading pair, the maximum single position value for the follower is 200,000 USDT. The follower's intended addition of 250,000 USDT exceeds this value.
The system will execute orders for the follower in multiple batches. Due to significant market fluctuations and slippage during the batch execution process, there might be instances where not all orders are filled, affecting the follower's copy trading returns.
In summary, the follower's position value for BTCUSDT at 50x leverage is 450,000 USDT (200,000 + 250,000), while the maximum position value allowed by the platform for BTCUSDT with 50x leverage is 450,000 USDT.
If the trader adds to their position again, say with a value of 30,000 USDT, the trader's capital used is 600 USDT (30,000 / 50). Following the 6.66 ratio, the follower should add 200,000 USDT (30,000 * 6.66), with a follower's capital used for this addition of 4,000 USDT.
⚠️ Currently, on the BTCUSDT copy trading pair, the maximum position value for 50x leverage is 450,000 USDT. The follower's position is already at the limit of 450,000 USDT for 50x leverage.
Therefore, the system will choose the next available leverage tier, which is 25x, for the follower's execution. The follower's capital used for this trade at 25x leverage is 8,000 USDT (200,000 / 25).
In conclusion, the trader's total capital used for positions is 1,950 USDT (600 + 750 + 600), and the follower's total capital used for positions is 17,000 USDT (4,000 + 5,000 + 8,000).
To sum up the scenarios in this context, the follower's copy trading might encounter the following four anomalies:
3. Inability to follow the trader's fund ratio due to reaching the maximum per-trade copy limit.
4. Splitting orders into multiple executions due to hitting the per-trade copy limit, resulting in potential failure to execute due to volatile market conditions, impacting the follower's returns.
5. Inability to fully follow the trader's leverage ratio due to reaching risk limits.
6. The follower falling behind in copying trades due to the trader's multiple additions without adding follower's capital, negatively affecting the follower's returns.