TL;DR: Look at the worst drawdown, not the best month. Avoid strategies that add to losing trades. Demand a long, verifiable record, and start with a small allocation.
Why copy trading looks better than it is
Leaderboards rank by recent return. The traders at the top are often those taking the most risk, and they tend to fall off as quickly as they arrive. A strategy that made 300% in three months has usually done something that can also lose 100%.
Check 1: maximum drawdown
The largest peak-to-trough fall in the account. If it was 40%, you should expect worse. If the provider hides it, don't follow.
Check 2: what happens to losing trades
Look at the trade history for:
- Martingale: doubling size after a loss.
- Grid or averaging down: adding more positions as the price moves against an open trade.
- No stop-losses: trades closed only when they come back.
These produce smooth equity curves for months and then a sudden, total loss. On gold, a 50- or 100-dollar trend against a grid can wipe out the account.
Check 3: track record length and verification
- At least a year, ideally more, of live trading.
- Verified by the platform or a third party, not screenshots.
- Through at least one volatile period for gold.
Check 4: costs and differences
- Performance fees or subscription fees.
- Your broker's spreads and slippage may differ from the provider's, especially around news; see slippage on gold.
- Symbol and contract size mapping between accounts; see XAUUSD symbol suffixes.
Check 5: how it connects
- Prefer official copy-trading features of a regulated broker or platform.
- Never give a provider your client-portal login; trading access, if required, should use a proper integration. See how to secure your trading account.
How to start
- Allocate a small amount you could lose entirely.
- Set your own maximum loss on the copy, if the platform allows it.
- Review monthly. Stop if the style changes or drawdown exceeds what you accepted.
Questions traders ask
Is copy trading regulated? In the EU and UK, some copy-trading services are regulated as portfolio management or investment advice. Many offshore services are not.
Can I copy a trader with a small account? Yes, but minimum lot sizes can distort the copy: if the provider risks 0.5% on their account, the smallest lot on yours might be 3%.
Are signals the same as copy trading? Signals are suggestions you execute yourself; copy trading executes automatically. The checks are the same.