Copy trading
Why follower returns differ from the leader
Follower returns differ because the follower starts at a different time, trades with different capital and constraints, and receives its own fills and costs. A leader’s historical PnL is neither a forecast nor the follower’s account result. Compare actual account outcomes on a consistent basis.
Joining changes the starting conditions
A leader may have built a position over days before you subscribed. Your account can enter at a new price, skip existing exposure or apply a defined startup rule. The leader’s lifetime gain on that position is unavailable to a follower joining later. Comparing both accounts from the same calendar date still requires checking whether their starting exposures match.
Deposits and withdrawals add another difference. A follower who changes committed capital during a trade can produce a different money-weighted result even when the underlying strategy targets stay similar.
Limits intentionally change the copied book
Allocation, leverage caps, market exclusions, concentration limits and drawdown controls can block or reduce trades. A minimum-size constraint can prevent a small account from holding a proportional position. These are meaningful execution outcomes, not missing spreadsheet rows that should be silently assumed to have filled.
Review skipped-trade reasons and the confirmed account exposure. If a risk limit protected your account from a loss, it could also keep the account out of a subsequent recovery. A risk setting changes the path rather than preserving the leader’s return with less downside.
Costs and timing accumulate
Follower executions can incur a spread, slippage, exchange fees and any applicable builder fee. Funding depends on the actual position and time held. A creator performance fee, when enabled and applicable, has its own schedule and profit basis. Keep these costs separate so you can distinguish trading quality from the cost of reproducing it.
Hypothetical example: both accounts have a $100 gross gain, but the follower incurs $15 of execution costs and the leader $5. Their net results differ by $10 despite the same quoted gross outcome. Different fills can enlarge that difference further.
Compare three distinct records
Keep the leader’s observed result, a portfolio’s modeled result and your account’s executed result separate. A simulation can explain a strategy method but cannot replace your fill ledger. When reconciling a divergence, start with startup time and target exposure, then inspect fills, costs, limits and cash flows.
- Use the same period and return definition.
- Check the subscription’s active dates.
- Read actual fills and blocked-order reasons.
- Label simulations and estimates explicitly.