The 11,000% PNL Lie
44sExposes a shocking truth about copy trading that challenges common belief, sparking curiosity and debate.
▶ Play ClipAI Summary
This video exposes the hidden mechanics behind copy trading platforms, revealing why most copiers lose money even when the master trader shows profits. It identifies two main causes—lack of effective risk management and scalping bots—and proposes a system to fix these issues.
Chapters
[00:04]
The Copy Trading Lie
Master traders on platforms like Bitget show impressive PNL, but copiers cannot see this money in their wallets. Most copy traders lose money even when the master trader is winning.
[00:33]
Reason 1: Risk Management Mismatch
The main reason copiers lose is that master traders do not implement risk management in a way that copiers can effectively use. Exchanges do not use stop losses, so losses can grow until the copier's account is liquidated while the master trader can wait for a reversal.
[02:13]
Example of Liquidation
If a copier has $100 and the master has $1,000, both commit $10 margin. If the trade goes against them, the copier gets liquidated at $100 loss, while the master can hold and eventually close for a win.
[02:28]
Why Funding More Doesn't Help
Even if a copier funds their account with $1,000, they cannot know the trader's full balance or initial margin. The trader might use only $1 of $1,000 and can top up during the trade, making it dangerous.
[03:13]
Reason 2: Scalping Bots and Fees
Many master traders use bots for aggressive scalping. Transaction fees can exceed profits, and exchanges report ROI without deducting fees, misleading copiers.
[04:08]
Solution: A Better System
A system should ensure predefined risk (stop loss and take profit before entry), filter out scalp trades to keep fees marginal, and include built-in management to rank traders by actual profitability after risk management.
[05:06]
Current Solution and Future App
The creator currently provides signals on Telegram and is building a copy trading app that automates the process, allowing users to connect accounts, choose margin, and apply these corrections.
Copy trading often fails because of hidden risk management flaws and fee structures. A system with predefined risk, scalp filtering, and proper management can help copiers achieve better results.
Mentioned in this Video
Study Flashcards (5)
What is the main reason copiers lose money in copy trading?
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What is the main reason copiers lose money in copy trading?
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Master traders do not implement risk management in a way that copiers can effectively use; exchanges do not use stop losses, leading to liquidation for copiers.
00:33
In the example, why does the copier get liquidated while the master trader survives?
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In the example, why does the copier get liquidated while the master trader survives?
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The copier has a smaller balance ($100) and gets liquidated when the loss hits $100, while the master with $1,000 can hold and wait for a reversal.
02:13
Why can't a copier simply fund their account with the same amount as the master trader?
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Why can't a copier simply fund their account with the same amount as the master trader?
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They cannot know the trader's full account balance or initial margin per trade; the trader might use only $1 of $1,000 and can top up during the trade.
02:28
What is the second reason copiers' results differ from master traders?
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What is the second reason copiers' results differ from master traders?
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Many master traders use bots for aggressive scalping, and transaction fees can exceed profits; exchanges report ROI without deducting fees.
03:13
What three things should a system ensure to fix copy trading problems?
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What three things should a system ensure to fix copy trading problems?
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Predefined risk (stop loss and take profit before entry), filtering out scalp trades to keep fees marginal, and built-in management to rank traders by actual profitability.
04:08
💡 Key Takeaways
💡
The Copy Trading Lie
Reveals a common misconception that copy trading is profitable, backed by testing across multiple exchanges.
00:04
📊
Risk Management Mismatch
Explains a fundamental flaw in copy trading systems that leads to copier losses.
00:33
📊
Scalping Bots and Hidden Fees
Highlights how fees can eat profits and how exchanges mislead with ROI reporting.
03:13
🔧
Solution Framework
Provides a clear, actionable framework for improving copy trading systems.
04:08Full Transcript
[00:04] master trader on Bitget. But they are lying to you. Because as a copier, you can never see this money in your wallet. The truth is that most copy traders lose money even when the master trader is showing
[00:20] winning. I have tested this across multiple exchanges. Bybit, Binance, multiple exchanges. Bybit, Binance, Bitget, Wicks, and so many of them. The result is the same. So today I'm going to show you the real reason
[00:33] copiers lose while the master trader stays in profit. And the solution that I'll discuss two reasons why this happen. The first and the main reason this happens is that the way making money in
[00:49] futures trading [music] works with risk management is not implemented by the master trader in a way that the copier can effectively You see, if you trade For me to make money, I have to risk
[01:03] money. If my trading setup is say 1:2, it means if I risk $100 and lose, I lose $100. But if I win, I win $200. For this to work, I must have a
[01:16] For this to work, I must have a predefined take profit and stop loss before I even enter the trade. But the thing is this, exchanges [music] don't use stop loss.
[01:29] don't use stop loss. Let's say you have $100 in your accounts and the master trader has $1,000 in his account. You both commit $10 in margin to a trade.
[01:42] If price start going against the direction of the trade, both you and the master trader will start having an unrealized loss. And because there is no stop loss, this loss keeps growing. Once it hits
[01:58] this loss keeps growing. Once it hits $100, your account is liquidated and you are out of that particular trade. Meanwhile, the master trader is still in the trade with an unrealized loss of $100 because he has a larger balance.
[02:13] He can wait. If the trade eventually reverses and goes into profits, >> the master closes it for a win. So, they get a win on their profile and [music] you lose your entire account. >> What?
[02:28] >> Now, you could say, "What if I fund my wallet with $1,000 so that I replicate doing?" The problem with this is [music] that you cannot know the trader's full account balance. You cannot also
[02:44] know the initial margin he's using per trade. As a matter of fact, he might be trade. As a matter of fact, he might be using just $1 out of his $1,000 and can also top up his account while the trade is in
[02:57] But, even if you know this, it is still a dangerous way to trade because the trade could keep going against you until the whole $1,000 is lost. Now, some traders can afford to trade this way because for each win they make you,
[03:13] they take a percentage in profit. And if they have enough people copying them, they actually end up in net profits even personal account. The second reason your result differs is that many master
[03:27] result differs is that many master traders use bots to aggressively scalp The problem with scalping is the transaction fee. Sometimes, [music] your transaction fee when scalping is actually higher than your profits. The
[03:42] exchange only reports the ROI on your dashboards without deducting the fee. I made a video on why scalpers lose money and why you should never scalp as a trader. You will see that video here on the card, and I will also leave it in
[03:56] the description of the video to check it after watching this one. So, what is the solution? How do we fix this? To fix this problem, it starts with a system itself. You need a system that ensures these
[04:08] You need a system that ensures these three things. One is predefined risk. A system that ensures a trader has [music] a stop loss and take profit sets before the trade is even placed. So, that if you enter with $10 margin,
[04:23] that $10 is the only thing at risk, not more than that. The second phase is that >> [music] >> You need a system that filters out scalp >> You need a system that filters out scalp trades so that the fees remain marginal
[04:37] compared to your profits. And lastly, you need built-in management. A system that only exposes you to high-quality traders and rank them by actual traders and rank them by actual profitability after risk management is
[04:51] this things I explained is how we trade me on Telegram using the link in the description to get our signals and manually place these trades. And right now, we are currently
[05:06] building a copy trading app that automates this whole process. All you do is to connect your trading accounts, choose your margin per trade, and that choose your margin per trade, and that system handles the rest, applying all
[05:21] these corrections I've talked about in the video. So, join me on Telegram and be the first to know when the system drops.
