In Binance signal-following, a lot of copycats have recently appeared. Here are my thoughts:
The core logic of trading is to execute a system with positive expected value under the law of large numbers. The biggest hard flaw of signal-following is that it can’t be perfectly replicated: the signal-provider takes profits and increases position size when the trade is in the green, tightly controls stop-losses, while the follower often “boards whenever they feel like it.” They end up following the losing trades with full weight and missing the winning ones entirely; coupled with the mismatch in position sizing, the result is inevitably making small profits and taking big losses.
Fatty Bitcoin once used a $200,000 live account to achieve $100 million in gains, with all operations fully transparent and publicly visible in real time. He made a fortune—100x—but signal-following retail traders suffered widespread losses and got liquidated.
Why can’t public live trading signals move people? Because the core of this system is low win rate + adding to positions when in profit + a high reward-to-risk ratio. During normal times, frequent trial-and-error stop-outs rely only on a few big market moves to explode. Retail traders don’t understand the system logic, so execution becomes misaligned. When the signal-provider trial-and-error stop-losses, retail traders with heavy positions follow along; meanwhile, the big winning trades where the signal-provider adds to positions in profit—retail traders either get scared and exit early, or their capital has already been wiped out long before.
The core logic of trading is to execute a system with positive expected value under the law of large numbers. The biggest hard flaw of signal-following is that it can’t be perfectly replicated: the signal-provider takes profits and increases position size when the trade is in the green, tightly controls stop-losses, while the follower often “boards whenever they feel like it.” They end up following the losing trades with full weight and missing the winning ones entirely; coupled with the mismatch in position sizing, the result is inevitably making small profits and taking big losses.
Fatty Bitcoin once used a $200,000 live account to achieve $100 million in gains, with all operations fully transparent and publicly visible in real time. He made a fortune—100x—but signal-following retail traders suffered widespread losses and got liquidated.
Why can’t public live trading signals move people? Because the core of this system is low win rate + adding to positions when in profit + a high reward-to-risk ratio. During normal times, frequent trial-and-error stop-outs rely only on a few big market moves to explode. Retail traders don’t understand the system logic, so execution becomes misaligned. When the signal-provider trial-and-error stop-losses, retail traders with heavy positions follow along; meanwhile, the big winning trades where the signal-provider adds to positions in profit—retail traders either get scared and exit early, or their capital has already been wiped out long before.