Copying Tips in Copy Trading [Sharpe Ratio & Yield Curve] - January 2025, Gate
Copy trading is a type of trading product that allows users to lead trades or copy the trades of others. As a copier, it is very important to choose a suitable trader. This article will introduce two methods to assess a trader’s leadership ability, as well as the latest trends for 2025, including enhanced platform indicators, advanced selection strategies that incorporate portfolio diversification, and Gate’s innovative cross-margin system and one-way trading (for reference only).
The latest trends in copy trading for 2025
Key Statistical Data of Each Platform
In 2025, the copy trading platform shows significant growth, and the Gate system has enhanced performance metrics:
| Platform features | industry average level | Gate platform |
|---|---|---|
| Maximum number of leading traders | 5-7 | Up to 10 |
| Slippage Protection | 0.75% | 0.5% |
| copy trading ratio options | 1-2 | Fixed ratio and fixed amount |
| Supported trading pairs | ~75 | More than 100 |
Advanced Selection Strategy
In addition to the Sharpe ratio and return curve analysis, successful copy trading investors are now diversifying their portfolios by selecting leading traders with complementary strategies. Gate supports this approach through enhanced trader performance analytics and automated risk management tools.
Platform data shows that followers using multiple leading traders with different trading systems have a 23% lower exposure to volatility risk compared to copying a single trader’s strategy.
Platform Innovation
Gate’s copy trading system focuses on a逐仓保证金模式 and single-direction trading, providing clearer risk boundaries than the full margin alternatives offered by other platforms. The separation between copy trading accounts and futures accounts ensures dedicated capital allocation for optimal position management.
Tips for Copy Trading in Real Trading [Sharpe Ratio & Yield Curve]
Copy trading is a trading product that integrates user-led trading and user-following trading. The process of selecting a trader as a copy trading user is particularly important. This article will introduce you to two methods for assessing a trader’s ability to lead trades (for reference only).
Two methods to assess a trader’s copy trading ability (for reference only)
Sharpe Ratio - An indicator for quickly assessing a trader’s copy trading ability and stability.
Profit Curve - Visually observe the performance and profit fluctuations of traders in copy trading.
Sharpe Ratio Explanation
What is the formula for calculating the Sharpe ratio?
In Gate’s live copy trading, the Sharpe ratio can be simply understood as a technical parameter, which is obtained by the average return of the trader divided by the standard deviation of the returns.
The total return rate and the standard deviation of returns are updated every hour. For more information on return rate calculations, please refer to: Gate Copy Trading Total Return Rate Calculation Adjustment Documentation
Sharpe Ratio Value and Practical Applications
The Sharpe ratio is an indicator that measures the relationship between return and risk, which is related to the copy trading operator’s performance. For example, if operator A has an average return of 10% and a risk of 20%, while operator B has an average return of 10% and a risk of 30%, it is easy to see that operator A has a more advantageous relationship between return and risk.
However, if the average return rate of trader C is 10% and the risk of trader C is 20%, while the average return rate of trader D is 20% and the risk of trader D is 50%, how can we objectively evaluate the risk-return relationship between C and D?
This is where the Sharpe Ratio comes into play. According to the Sharpe Ratio calculation formula: the mean return of the trader / standard deviation of returns (the larger the standard deviation of returns, the higher the risk). Next, using the cases of Trader C and Trader D, we briefly explain how to use the Sharpe Ratio to choose between the two: converting the relationship between risk and return into the Sharpe Ratio, Trader C’s Sharpe Ratio = 10% / 20% = 0.5, Trader D’s Sharpe Ratio = 20% / 50% = 0.4.
It is clear that using the Sharpe Ratio to evaluate Trader C is better. Thus, as a copy trader, one can use the Sharpe Ratio to make a simple assessment of the trading ability of traders, thereby reducing investment risk and increasing investment returns.
Explanation of the Yield Curve
What is the performance form of the yield curve?
The performance of the yield curve is represented as follows: the horizontal axis represents the trader’s time unit, and the vertical axis represents the two-dimensional coordinate curve of the trader’s yield rate.
Case Analysis: What Value Information is in the Profit Curve?
As shown in the figure below, the profit curve is displayed in the form of time and return rate curves, allowing copy traders to more intuitively observe the overall trend of the trader’s profit rate.
The peak yield in the chart represents the potential copy trading ability of the trader, while the peak yield and undervaluation reflect the trader’s stability in copy trading. Overall, the copy trading situation of this trader is stable and reliable, and it is in a phase of overall yield surge. However, there may also be intermittent and slight declines in yield. Nevertheless, the stop-loss control is quite good, with very few cases of capital loss occurring, indicating that the trader has sufficient means to cope with the volatile market conditions, making it worth considering to follow their trades.
