# Five Basic Principles for Copy Trading

> Copy trading can lower the difficulty of investing, but it still requires patience, skill, and risk discipline.

- Locale: en
- Published: 2026-06-02T00:00:00.000Z
- Updated: 2026-06-02T00:00:00.000Z
- Category: tutorials
- Tags: Copy Trading, Risk Management, Portfolio
- Canonical URL: https://owly.fi/blog/en/five-basic-copy-trading-principles/
- Alternate Locale URL: https://owly.fi/blog/zh/five-basic-copy-trading-principles/

Copy trading can greatly reduce the difficulty of investing, but it is definitely not passive income. If building your own strategy to achieve high returns has a difficulty of 100, then achieving high returns through copy trading may be 30, or maybe 10, but it is definitely not 0. There are still many things worth learning and paying attention to.

Here are some of the most basic suggestions:

1. Correct mistakes immediately. If the lead account's strategy style is inconsistent with what you expected, or if you discover other obvious mistakes, you should stop in time. Do not keep holding because of sunk cost.

2. Do not allocate too much capital to a single copy account, and try not to exceed half of the lead account's size. For example, do not use 100k USDC to copy another 100k USDC account. A more prudent approach is usually to keep it within 30% of the lead account's size. This is our default copy trading setting; if it exceeds this value, copy trading may be unable to start or may be stopped.

3. We recommend diversifying across different strategies and different addresses. Do not put all your capital into one style. In practice, capital can be allocated based on risk parity, maximum drawdown budget, or strategy correlation. This is a big topic, and we will introduce it separately in the future.

4. Test a new address with small capital first. Wait 1-2 days to see whether there is any execution deviation, analyze the reason, and then gradually increase the position. Do not use large capital from the start to test a strategy you have never copied before.

5. Do not chase pumps or panic sell, and do not expect to make money on the first day. Based on our long-term observation and practice, traders who manage large amounts of capital and stay relatively profitable over a long period are usually not relying on luck. Users often choose to copy them after seeing strong recent profits. But if there is a loss right after copying, you should carefully analyze the reason. If it is normal fluctuation, it is usually better to give it some time. Also, when choosing a target, try not to chase too high.

In short, copy trading also requires patience and skill. The points above are only the most basic principles. We will keep updating more content in the future, and hope everyone stays tuned!