CFD Copy Trading Product Description ｜ Gate

Basic Logic of CFD Copy Trading

The CFD copy trading mechanism replicates trades based on the proportion of total assets.

Calculation Formula

1. Opening a Position: Number of lots copied by the user = Copy trading user’s account net value / (Trader’s account net value + Trader’s order fee) × Trader’s order lots
2. Partial Closing Scenario: Number of lots partially closed by the copy trading user = Lots closed in the trader’s position / Total lots in the trader’s position × Total lots in the copy trading user’s position
3. Closing Scenario: The copy trading user follows the trader and closes the position at market price

Example Cases

1. Opening a Position
   The CFD trader’s account has assets of 10,000, opens 1 lot, with a fee of 6. After the order, the trader’s account net value is 9,994, and the copy trading user’s account asset is 5,000.
   Number of lots copied by the user = 5,000 / (9,994 + 6) * 1 = 0.5

2. Partial Closing
   The CFD trader currently holds 1 lot and partially closes 0.2 lots. The copy trading user follows with 0.5 lots.
   Number of lots partially closed by the copy trading user = 0.2 / 1 * 0.5 = 0.1

3. Closing
   If the CFD trader fully closes a position, the copy trading user will also fully close the corresponding copied position.

Special Scenarios

1. Due to minimum lot size restrictions when placing orders:
   • If the system’s minimum order size is 0.01 lots and the calculated lots to copy are 1.111, the system will round down and place 1.11 lots;
   • If the minimum order size is 0.1 lots and the calculated lots to copy are 1.111, the system will round down and place 1.1 lots;
   • If the minimum order size is 1 lot and the calculated lots to copy are 1.111, the system will round down and place 1 lot;

2. Due to maximum lot size restrictions when placing orders:
   • If the system’s maximum order size is 10 lots and the calculated lots to copy are 20, the system will round down and place 10 lots;

Common Copy Trading Failure Cases

1. If the copy trading user’s funds < trader’s funds, and the trader places an order of 0.01 lots, the calculated lots for the copy trading user will be less than 0.01 (which is the minimum order size). Therefore, the copy trading user will fail to copy the trade;
2. If the copy trading user’s margin ratio <= 100%, and the trader deposits funds and opens a new position, the copy trading user will fail to copy the trade;

CFD Copy Trading Profit Sharing Logic

As a Gate CFD copy trading trader, you can earn a percentage of the net profits generated by your copy trading users. This profit sharing mechanism uses the High Water Mark (HWM) calculation principle.

Profit Sharing Mechanism: High Water Mark (HWM) Calculation

• Profit sharing is determined by the copy trading user’s cumulative net profit and loss (including both realized and unrealized P&L) during the trading period, calculated according to the High Water Mark principle;
• Profit sharing only occurs when the copy trading user’s cumulative net P&L exceeds the recorded highest net P&L;
• If there are losses during trading, the trader must fully recover the losses before becoming eligible for profit sharing again;
• A new High Water Mark is only established when cumulative net P&L exceeds the previous High Water Mark, ensuring traders are rewarded only when they continuously generate profits for copy trading users;

Calculation Logic

• Cumulative net P&L during the period = All realized P&L since the start of copy trading + all current unrealized P&L - cumulative fees + cumulative funding fees + dividends;
• Eligible copy trading user P&L for profit sharing = Cumulative net P&L during the period - High Water Mark at the last profit sharing trigger;
• Profit sharing is calculated only when “eligible copy trading user P&L” > 0; otherwise, no profit sharing;
• Profit sharing amount for the copy trading user during the trading period = Eligible copy trading user P&L * profit sharing rate;
• Sum the profit sharing amounts for all copy trading users under the trader to get the total profit sharing amount to be transferred to the trader;

Example

CFD Core Metrics Calculation

Profit and Loss

1. Calculation Formula
   Period P&L = Current assets – cumulative deposits during the period + cumulative withdrawals during the period – assets at the beginning of the period

2. Example
   Current assets: 150, assets seven days ago: 100, cumulative deposits during the period: 20, cumulative withdrawals: 10. The seven-day P&L is:
   Seven-day P&L = 150 – 20 + 10 – 100 = 40

Rate of Return

1. Calculation Formula
   Rate of return = (Ending assets – cumulative deposits during the period + cumulative withdrawals during the period – assets at the beginning of the period) / (assets at the beginning of the period + cumulative deposits during the period)

2. Example
   Current assets: 150, assets seven days ago: 100, cumulative deposits during the period: 20, cumulative withdrawals: 10. The seven-day rate of return is:
   Seven-day rate of return = (150 – 20 + 10 – 100) / (100 + 20) = 33.33%

Sharpe Ratio

1. Calculation Formula
   

Maximum Drawdown

1. Calculation Formula
   Maximum Drawdown Rate (MDD) = Max[(historical maximum rate of return – current day rate of return) / (historical maximum rate of return + 1)]

2. Example of 7-Day Maximum Drawdown
   To calculate the maximum drawdown at 0:00 on June 8, use the rate of return at 0:00 on June 8 as the starting point, calculate the drawdown for the 7 days from 6.1 to 6.8, and find the maximum value.

Common Questions About CFD Copy Trading

1. After stopping copy trading, why does the status show “Copy Trading Stopping”?
   Because the CFD contract market has closing periods. If the copy trading user holds positions during the market closure, the system will display the “Copy Trading Stopping” status. Once the market reopens, the system will automatically settle and stop your copy trading.

Disclaimer

The content provided herein is for reference and educational purposes only and does not constitute any financial, investment, trading, or legal advice, nor does it constitute an offer or solicitation to buy or sell any digital assets. Gate makes no express or implied representations or warranties regarding the accuracy, completeness, or timeliness of the information contained herein. Product features, interfaces, rules, and fee structures may be updated or adjusted at any time. Please refer to the latest announcements and the actual information displayed on the Gate platform for the most accurate details.
Digital asset investments involve significant risk, and prices may fluctuate substantially. You may lose the entire amount of your investment. Please make decisions cautiously based on your own financial situation and risk tolerance after fully understanding the associated risks. If necessary, you are advised to consult an independent professional financial or legal advisor.
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