Announcements [Lead Trader] FAQ

[Lead Trader] FAQ

2024-03-11 06:19:24 UTC 9173 Read

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## Q1. Description of Gate.io Copy Trading Logic

## A: 1. Copying Logic of Copy Trading

1.Copy trading is based on the number of adjusted positions by the trader, the number of copying transactions (rounded down) = the proportion of copying * the number of adjusted positions. If the number is less than the minimum copying number of futures, it is not copied.

2.Then, it calculates the copier's available trades according to the user's available funds and the set future leverage. If the number of copy trades ≤ the number of available trades of the copier, the copy will be successful, otherwise the copy will fail.

3.Without considering the copying leverage, leverage system and single constraints, the copier will copy the position change of the lead trader until the copying fund is not allowed. When the lead trader reduces the position of the corresponding copying future, the copier will gain corresponding available funds.

4.The copier should pay copying margin. Every time you copy a trader, the funds of the spot account will be transferred to the sub-account in the form of a virtual sub-account, and the sub-account will only copy the trader. After copy trading, it will be liquidated. After deducting the share and trading fees, the remaining funds will be transferred to the spot account.

5.Copying Method. Copy Trading supports two copying methods: "Proportion to Total" and "Fixed". The default copying method in Simple Copying Mode is "Proportion to Total", while Advanced Copying Mode supports both methods.

Proportion to Total: Total Assets = Available + Value of Holding Positions. If a lead trader's total assets are worth 100 USDT (Available 50 USDT + a position in BTC/USDT market worth 50 USDT) and he/she invests 10 USDT, then the portion of the investment in total assets is 10%. You will also invest 10% of your total assets to copy trade (for example, 5 out of 500 USDT).

Fixed: If you set it to 3x, you will copy the contract value of 3 BTC (1*3) when the lead trader opens a contract value of 1 BTC/USDT.

## A: 2.Case Study of Copying Logic

Without calculating trading fees and funding rates:

If the lead trader has a total of 1,000U of funds, of which 100 U is used to buy the future of token A, with a leverage of 100 times. Then the value of the opened position is 100*100=10,000U；

If the total number of copying funds of the copier is 100U, with the copying proportion set to 0.1, and the leverage set to 20 times. Theoretically, the copy position of the copier copying the above orders is 10,000 * 0.1 = 1,000U in total.

The copier needs to invest a margin of 1,000/20=50U to copy, then the remaining available funds of the copier are 100-50=50U;

Subsequently, the lead trader used 200U to buy the future of token B, with a leverage of 100 times. The value of the position is 200 * 100 = 20,000U;

Then, the copier has a remaining available fund of 50U, a leverage of 20 times and the maximum position value that can be built of 1,000U.

If the copier wants to continue to copy the lead trader to buy the future of token B, the copier can only build a position of 1,000U. So far, the copy funds are all used up.

At this time, the prices of both A and B tokens have risen by 10%, and the trader closes the position:

Earnings of the trader: (11000-10000) + (22000-20000) = 3000U;

Earnings of the copier: (1100-1000) + (1100-1000) = 200U.

##A: 3.Possible Problems in Copying Logic

The copier may find that his/her earnings and traders' earnings do not coincide. When the copier has a different capital and uses a different leverage or setting a fixed copying proportion, etc., there will be an inconsistency of return between the copier and the trader. The copier needs to carefully set their own copying parameters and select a trader who has similar funds to him/her to copy.

Gate.io reserves the final right to interpret the product.

## Q2.Why is there an Inconsistency Between the ROI of Traders & Copiers?

**A:**1.The different deposit amounts between the trader and the copier will lead to a different ROI. If the copier has insufficient funds, he will be unable to copy the trader in the follow-up trades.
The current copy logic is: the copier copies the position change of the trader for as long as his/her copy funds’ balance allows. If the previous operation/trade of the trader occupies all of the copier’s funds, the copier cannot follow the subsequent trades of the trader. Please refer to Q1 for more details.

**A:**2.If a trader has an open future position before copiers copy him, and adds a position after copiers copy him, there will be different costs for the copiers and the trader in the same future, and different returns after the position is closed.

**A:**3.Copiers set the copying leverage in the copying parameters, which results in different returns between the trader and a copier after the position is closed.

**A:**4.The leverage of copiers and traders is inconsistent. Currently, for risk control purposes, the maximum leverage of future copiers is 20 times, while the maximum leverage of some future traders is 100x, and the inconsistency of leverage may lead to inconsistent returns between the two.

**A:**5.Copiers can use customized copying method, which refers to the percentage or times of copying the lead trader's position. For example, if the copier sets 10 times, the trader adds 10 futures and the copier will increase the position 10 * 10 = 100 futures. The copying proportion can be set between 1 and 100. It is recommended to set the copying proportion according to the fund amount of copiers and the proportion of funds of traders. For example, when the interest of the traders is 1,000 usdt, and the copiers' fund is 1,000 usdt, it is recommended to set the copy proportion to 1 X(1,000/1,000). If the copier's fund is 5,000 usdt, the copying proportion can be set to 5X (5,000/1,000=5).

##Q3. How is the ROI of a Trader Calculated?

## A:1.Calculation Formula of Total Return & ROI

Initial account net value = balance available when it is created
Total Return = Closing account net value (including unrealized PNL) - initial account equity (including unrealized PNL) + interval withdrawal - interval deposit
ROI= Total Return/ (Initial account net value + deposit) * 100%

## A:2.Calculation Formula of 7-day Total Return and ROI

Initial account net value = Account net value 7 days ago (including unrealized PNL)
Total Return = Closing account net value (including unrealized PNL) - initial account equity (including unrealized PNL) + interval withdrawal - interval deposit
ROI = Total Return / (Initial account net value + deposit) * 100%

##Q4. Gate.io Copy Trading: Profit Sharing Calculation & Distribution Method

## A：1.Profit Sharing Calculation - Triggering Conditions Include:

The copier withdraws profit sharing: Trigger calculation when the copier requests to withdraw profit sharing

The copier stops copying: Trigger automatic calculation when the copier stops copying

Periodical Calculation: 1.Taking the time of the lead trader's first order, first profit sharing calculation will be carried out every 7 days: If copiers have no position connection with the trader (that is, all the trader's copying orders on the day have been closed), then profit sharing calculation will be triggered; If the trader has open positions with copying orders, the calculation of profit sharing will start the day when there's no position connection between the trader and copiers. 2.The next profit calculation will be carried out 7 days after the last profit calculation, based on rules in 1.
![](https://gimg2.gateimg.com/image/article/1712141886en1xxxscreenshot-20240403-185212.png)

![](https://gimg2.gateimg.com/image/article/1712140091en220240403-182027.jpeg)

## A：2.Profit Sharing Calculation - Distribution Process is as follows:

2.1.Automatic distribution: Automatically distribute traders' profit sharing calculated before 00:00 UTC at 01:45 UTC every day successively.

2.2.Manual distribution: Distribute profit sharing through a dedicated interface to handle special situations or emergency needs.

## A：3.Distributed Profit Sharing

3.1.The trader will receive the profit sharing payment upon successful distribution, and then the whole profit sharing process ends.

**Gate.io reserves the final right to interpret the product.**

## Q5. Why Will Lead Traders' Homepages Be Hidden? / What is Lead Traders' Cooling-off Period?

**A：**To ensure that excellent lead traders can be found by more copiers, the Copy Trading platform will hide some traders who are not active in trading. These then can not be searched by users on the homepage. When they trade actively again, the platform will restore their homepages.

## A：1.Situations When Lead Traders’ Homepages Are Hidden
Failing to set leading parameters after the application was approved;

Failing to finish the first trade in copy trading;
Currently, there is no leading position and no trading records in the past 3 weeks;

Leading status must be valid, situations like suspending and terminating are not allowed;

Being hidden due to insufficient funds.

**Note:** At present, the Copy Trading platform has set restrictions on the minimum leading amount for beginner lead traders. If they fail to meet the requirements of the minimum leading amount, they will be hidden by the backend automatically until sufficient funds are replenished. As for the requirements of minimum leading amount for beginner lead traders, you can check it on the “Leading Mode” page. Minimum lead trading asset requirements for beginner lead traders: ≥ $300 USDT.

If you meet any of the above situations, your homepage will be hidden; if you have been hidden for other reasons, please contact [customer service](https://t.me/Gate_CopyTrading "customer service") on time.

## A：2.Instructions on Lead Traders' Cooling-off Period
At present, the cooling-off period of lead traders will be triggered (that is, a lead trader is blocked by the backend) mainly due to the following three situations:

## 2.1.Lead traders’ behaviors do not meet the current level requirements

Please refer to the above situations when lead traders’ homepages are hidden.

## 2.2.Lead traders’ personal leading description involves external links or external community referral links

The Gate.io Copy Trading platform strictly prohibits lead traders from contacting copiers through unofficial channels, such as adding external contact links to their personal profiles, like personal twitter, Weibo, WeChat, Telegram account, etc., which will affect copiers’ rights and interests, as well as the security of funds.

Lead traders who were found getting out of line for the first time will be degraded; the same user who was caught for the second time will be disqualified from participating in copy trading and be exposed by the platform.

Lead traders and copiers are internal resources of Gate.io Copy Trading. To better guarantee the copiers’ rights and interests, as well as the security of funds, all the behaviors of leading and copying are limited to the platform internally.

Warm Tips: Lead traders can interact with copiers through Posts and subscription. It is strictly forbidden to contact copiers through unofficial channels. Once discovered, the platform will punish him/her severely!

## 2.3.Conduct High-risk Trading Operations

Lead traders’ every step of the trading is closely related to the interests and property safety of copiers, so the platform has repeatedly reminded lead traders to operate cautiously, control risks, use leverage carefully, and strive to protect the safety of the capital. If lead traders deliberately carry out high-risk operations, which the platform thinks will cause huge losses to copiers, the lead traders will be hidden by the backend.
Gate.io is an established exchange that holds integrity, transparency, and fairness to a very high standard. It charges zero listing fees and only choose quality and promising projects. It always make the protection of the interests of each user a top priority. Thanks to everyone who has joined us on our journey. Let’s fight counterfeiting together and maintain a healthy and fair trading environment!

Note: Currently only Futures lead traders have a cooling-off period, not spot lead traders.

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