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 follower = Follower's account net value / (Trader's account net value + Trader's order fee) × Trader's order lots
2. Partial Closing: Number of lots partially closed by the follower = Lots closed in the trader's position / Total lots in the trader's position × Total lots in the follower's corresponding position
3. Closing a Position: The follower closes the position at market price, following the trader.

Example

1. Opening a Position
   A CFD trader's account has assets of 10,000, opens 1 lot, with a fee of 6. After the order is placed, the trader's account net value is 9,994, and the follower's account assets are 5,000.
   Lots copied by the follower = 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 follower is following with 0.5 lots.
   Lots partially closed by the follower = 0.2 / 1 * 0.5 = 0.1

3. Closing a Position
   If the CFD trader fully closes a position, the follower will also fully close the corresponding copied position.

Special Scenarios

1. Due to minimum lot size restrictions when placing orders:
   • If the system sets the minimum lot size at 0.01, and the calculated lots for the follower are 1.111, the system will round down and place an order for 1.11 lots.
   • If the minimum lot size is 0.1, and the calculated lots are 1.111, the system will round down and place an order for 1.1 lots.
   • If the minimum lot size is 1, and the calculated lots are 1.111, the system will round down and place an order for 1 lot.

2. Due to maximum lot size restrictions when placing orders:
   • If the system sets the maximum lot size at 10, and the calculated lots for the follower are 20, the system will round down and place an order for 10 lots.

Common Copy Trading Failure Cases

1. If the follower's funds are less than the trader's funds, and the trader places an order for 0.01 lots, the proportionally calculated lots for the follower will be less than 0.01 (which is the minimum lot size allowed). Therefore, the follower's copy order will fail.
2. If the follower's margin ratio is ≤ 100%, and the trader deposits more funds and opens a new position, the follower's copy order will fail at this time.

CFD Copy Trading Profit Sharing Logic

As a Gate CFD copy trading trader, you can earn a certain percentage of the net profits generated by your followers. This profit-sharing mechanism is calculated using the High Water Mark (HWM) principle for follower P&L settlement.

Profit Sharing Mechanism: High Water Mark (HWM) Principle

• The profit share is calculated based on the follower's cumulative net P&L (including both realized and unrealized P&L) during the copy trading cycle, following the High Water Mark principle.
• Profit sharing only occurs when the follower's cumulative net P&L exceeds the recorded highest net P&L.
• If there are losses during copy trading, the trader can only qualify for profit sharing again after fully recovering the losses.
• A new high water mark is set only when the cumulative net P&L exceeds the previous high, ensuring that traders only receive profit sharing when they consistently generate profits for followers.

Calculation Logic

• Cumulative net P&L during the period = Total realized P&L since the start of this copy trading session + All current unrealized P&L - Total fees + Total funding fees + Dividends.
• Eligible follower P&L for profit sharing = Cumulative net P&L during the period - High water mark at the last profit sharing event.
• Profit sharing is only calculated when "eligible follower P&L for profit sharing" > 0; otherwise, no profit sharing is calculated.
• The profit sharing amount for a follower during this copy trading cycle = Eligible follower P&L for profit sharing * profit sharing rate.
• Sum the profit sharing amounts for all followers under the trader to get the total profit sharing amount to be transferred to the trader.

Example

Core CFD Metrics Calculations

P&L (Profit and Loss)

1. Calculation Formula
   Period P&L = Current Assets – Total Deposits During the Period + Total Withdrawals During the Period – Initial Assets

2. Example
   Current assets: 150, assets 7 days ago: 100, total deposits during the period: 20, total withdrawals during the period: 10. The 7-day P&L is:
   7-day P&L = 150 – 20 + 10 – 100 = 40

Rate of Return

1. Calculation Formula
   Rate of Return = (Ending Assets – Total Deposits During the Period + Total Withdrawals During the Period – Initial Assets) / (Initial Assets + Total Deposits During the Period)

2. Example
   Current assets: 150, assets 7 days ago: 100, total deposits during the period: 20, total withdrawals during the period: 10. The 7-day rate of return is:
   7-day rate of return = (150 – 20 + 10 – 100) / (100 + 20) = 33.33%

Sharpe Ratio

1. Calculation Formula
   

Maximum Drawdown

1. Calculation Formula
   Maximum Drawdown (MDD) = Max[(Historical Maximum Return – Current Return) / (Historical Maximum Return + 1)]

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

Frequently Asked Questions About CFD Copy Trading

1. After stopping copy trading, why does it show "Copy Trading Stopping" status?
   Because the CFD market has non-trading periods. If a follower holds positions during market closure, the status will display as "Copy Trading Stopping." Once the market reopens, the system will automatically settle and stop your copy trading.

2. Explanation of CFD Copy Trading End Popup Fields

• Margin Balance: The net value of the CFD copy trading account
• Total P&L: Margin balance - Net copy trading amount
• Net Copy Trading Amount: Initial investment + Total additional investment - Total principal withdrawn
• Estimated Profit Sharing Amount: Settled profit sharing + Pending profit sharing
• Estimated Receivable Amount (project level): Margin balance (project level) - Remaining estimated pending profit sharing amount
• Remaining Estimated Pending Profit Sharing Amount: Unrealized P&L in unshared positions * Current profit sharing rate

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.
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