Copy trading can be powerful, but only if you know how to evaluate signal providers correctly. Many followers lose money because they focus only on returns and ignore the real risk factors.
This step-by-step guide explains exactly what to check before subscribing to any trader.
1. Set Proper Filters
Before analyzing any trader in detail, apply these basic filters to reduce risk:
- Maximum drawdown: should be 30% or less
- Trade frequency: maximum 50 trades per month (anything above that becomes difficult to copy reliably)
- Consistency: performance should not rely on short bursts or lucky streaks
These filters remove the majority of dangerous strategies immediately.
2. Verify Account Authenticity
A legitimate copy trading account must be:
- a real, live account (not demo or cent)
- fully verified on platforms like Myfxbook or FXBlue
- connected to a regulated broker
- transparent about trade history and open positions
If any of these points are missing → avoid it.
3. Analyze the Equity Curve
The equity curve reveals the true health of the strategy.
Look for:
- smooth, controlled growth
- no massive drops
- no suspicious recovery spikes
- no long periods of high floating drawdown
- no patterns typical for Martingale/Grid
Red flags include:
- sudden vertical drops
- long plateaus with hidden floating losses
- V-shaped recoveries from deep drawdowns
- increasing position sizes after losses
If you suspect Martingale or Grid trading, investigate further carefully.
4. Evaluate Trade Frequency and Strategy Logic
The trade frequency must match the strategy:
- swing traders → low frequency
- intraday traders → medium frequency
- scalpers → high frequency (bad for followers)
Avoid:
- inconsistent frequency
- random trade timing
- oversized position sizes
- strategies that trade every tiny market move
Stable systems operate with discipline.
5. Assess the Return Profile
Returns should be:
- realistic
- stable
- proportional to drawdown
Avoid strategies claiming:
- 50–100% per month
- instant account doubling
- unstable equity curves with sudden jumps
Sustainable returns typically fall in the 10–30% annual range with proper risk control.
Final Considerations
The goal of evaluating a copy trading account is not to find the highest return, but the lowest sustainable risk.
Consistent, low-drawdown strategies are far more scalable and safer long-term.
FAQs
What is the most important metric when evaluating a copy trading account?
Drawdown. It reveals how much risk the trader actually takes.
Are high-return strategies good?
Not necessarily. High returns often hide excessive leverage or dangerous strategies.
How many trades per month are safe?
Ideally under 50. High-frequency systems are hard for followers to copy.
Is verification necessary?
Absolutely. Never follow an unverified or demo account.
What is the safest type of trader to copy?
Traders with low drawdowns, stable equity curves, and consistent trade logic.