This week's info post is about my Copy Trading category again. It's a long one.

I'm assuming you read last week's post and know how I lost over $4,000 before I figured out what I'd done wrong.

This post contains - FINALLY! - the version that works. Or at least is working for me right now and has been for a couple of months. How I'm set up, who I follow, and some other useful stuff. 

• Obligatory disclaimer: I do not know the trader I follow, I am not an expert, and this is NOT advice of any kind. I recount what works for me, with absolutely no guarantees that it'll work for anyone else. Do your own research, make your own decisions!

Let's start with some of the trader types and tips on what to look for.

The Good, The Bad and The Ugly

Like with any fundamentally anonymous system, picking traders to follow is hard. From my time losing vast piles of money learning just how hard, I've found that there are three basic types of trader.

The Good are the ones who are reliable. They make losses like any trader, but they reduce those with careful management of their open positions, by limiting the amount they invest in each trade (typically less than 1% of their total funds), by closing out a losing position before it gets bad enough to chew up all your money... by generally being a proper trader! As you would imagine, these people are very rare and very difficult to find.

The Bad are the ones who look reliable, then blow all your money in one bad trade because they're actually not very competent. You can spot them using an extended testing period with a small seed. Throw the minimum $50 in (MEXC has updated that from $30, boo!) and wait a month or two. Most of the Bad traders will fail dramatically and catastrophically within that period. Of course, it sucks to lose $50 but that's the price of finding out. Unfortunately, these people are very common and hard to spot without testing.

The Ugly are the ones who have no clue but think they'll "give it a try". They frequently have very impressive stats because they managed one or two cool-ass trades in a bull market or just got lucky. People throw money in, the market settles and suddenly everyone loses everything. The trader waits a couple of weeks, renames their account, and does it again. Why, I don't know: perhaps they enjoy screwing people out of their money. Unfortunately (again), these people are common, though a little easier to spot.

What to Look For

I can't guarantee your results... but hopefully these thoughts will help:

• Do not trust MEXC's evaluations of "top" traders, daily picks, and especially not "highest ROI".
• Ignore traders with "Best", "Alpha", "Safe", "Trusted" and other such words in their name.
• Keep simple notes on each trader somewhere, so you can look back at why you kept or dropped them.
• Ideally, keep records based on their ID (the alphanumeric at the end of their info URL), not their name.
• Always add traders you follow to your Watchlist (so you can see when they change names).
• Check how many followers they have.
• Look at their 180-day charts to spot when they dip to -100% PNL and start again: that's a catastrophic loss.
• Look at how big their total investment fund is - the bigger, the better.
• Look at whether they do cross or isolated margins (less important once tested).

The short version is, unfortunately, that you can't tell very much from the details MEXC shows you, unless you go through all the history of trades and examine them all. Plus, of course, past performance does not guarantee future results.

From a personal perspective, I got burned by traders called The_Werewolf (2F5BF9D), Crypto Surfer (155B59A), MrSaiky (EC34FC), Tmoney (15376E9).

And the worst of all was WastefulWorld, who lost most of that huge chunk of money, renamed as TheBaldie and continues trading (4F18AE1).

As I say, past performance isn't necessarily indicative, but once bitten, twice shy.

Fire and Forget or Manage?

Once you've found the traders to test, your next decision is how you want to copy their trades.

I leave all the settings on their defaults, except the trade mode and "Margin Settings" (which I move to "Follow Trader").

I have two approaches to the trading mode: "Fire and Forget" and "Manage".

"Fire and Forget" uses the Smart Ratio setting. If a trader invests 1% of their total funds in a trade, you follow suit with 1% of whatever your fund is. It's the safest option, assuming you're following a decent trader, as it ensures you stay within their risk and competence levels. There's nothing much for you to do with this setting, though you might want to set TP and SL levels and so on (I leave all those except the Margin Settings, as noted above).

That's it. You set it up, leave it running. Fire and forget.

"Manage" - using the Fixed Amount setting - is an option I honestly prefer, as it allows me to manage my risk. It means that you always put the same amount of USDT into each trade, regardless of what the lead trader does. If you set it to $1 (of your $30 test), you always do $1 trades. Demented lead trader puts in 10% of their fund? Doesn't matter, you use $1. They do 0.1%? Doesn't matter, you use $1.

If you go this route, you'll potentially need to watch positions much more closely and shut down big losses before they wipe you out. The lead trader works with their numbers, not yours, so if they put 0.1% in and are 4,000% down, they're fine. If you put 2.5% in, you've already lost everything. 

The flip side is potentially bigger profits. They put 0.1% in and get 500% profit, cool... you put $1 of your $30 in and get $5 profit (over 15% gain). Nice.

As I said, I like this option. I used it to risk 1% of my fund - after a lot of following and checking how bad things can get with a particular trader - and cashed in nicely. But then I also monitored open positions quite closely, in case there was a sudden dip. It's all about risk and reward, and how much effort you're prepared to put in. I'll probably switch back to the safer option now I'm back in the black.

Note that I would NOT recommend putting in more than 1% on Fixed Amount unless you love high-risk trades (and losses).

What About Profits?

MEXC has a simple option to take your profits whenever you want. Click, confirm, they're in your spot wallet.

Some people do this to reduce risk, taking the profit and (for example) buying BTC with it to HODL long-term.

But - and I have checked this with their support team - your earnings compound if you leave your profits in on Smart Ratio. Their system works with your current equity ("Total Equity" on the copy trading pages), not trade amount ("Copy Trade Cost").

In the end, it's up to you. I leave mine is because it's far more likely to build up to £1,000,000 that way - with the associated risk.

Who Do I Follow?

If you're not on MEXC yet, please use my referral link (costs you nothing, helps me): promote.mexc.com/r/lDmaLBdp

The only reliable trader I've found so far (though I currently have two more running in test mode) is PaulUrievich69.

This is his URL: https://www.mexc.com/en-GB/futures/copyTrade/leader/18528CB

As his blurb states, he regularly does 10% or more profit per month and I've never had a liquidation with him. Smart Ratio may do quite small amounts, as he trades with a significant amount of money.

And he's the reason I've earned all of that $4,000 back (and am finally in profit from yesterday) in 2 months and 8 days - 69 days, appropriately enough for his username - purely by copying his trades (with an occasional sneak tweak, that I'll cover in a later post).

I have a friend who's willing to run a test for me, too: she's gonna put $50 into following the same trader today (Smart Ratio, same settings as me) and leave it running. We can look back at her results in the future!

Any tips for copy traders? Who do you follow? Are you going to give it a try? Let me know in the comments!!