Copy-trading platform idea

[enamakel]

I've been tinkering a lot lately. So do give me your feedback.

Most copy-trading platforms exist today only in the fiat space. There are only a few people in the crypto space however none of them follow the model of a hedge fund.

A hedge fund operates under the model of where they take a performance fee, which is heavily lucrative (30%). This incentivizes fund managers to perform as their incentive is tied towards the profit of the fund. However, their losses are not shared.

Copy-trading platforms today don’t do this. They don't give traders an option to earn from the profits that their followers have made.
For example, if your followers have a NaV of $1mn and you make them an annual 10% return on their investment in following you; you could possibly earn say 30% from the profits that your followers have made.

Which means if your followers made $100k by following your trades, you'd be entitled to about $30k. I feel like this is how a CopyTrading platform should be and hence I'm collecting some initial users to help me build, test and try out this platform. If you think this is doable, fill out this form - https://forms.gle/nLSw36vmiuCbHjWc8. Would love to connect with like-minded traders. Let me know your thoughts in the comments. 

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[coinmatics]

We are just creating such a platform. You can try.

[exstasie]

I've been tinkering a lot lately. So do give me your feedback.

Most copy-trading platforms exist today only in the fiat space. There are only a few people in the crypto space however none of them follow the model of a hedge fund.

A hedge fund operates under the model of where they take a performance fee, which is heavily lucrative (30%). This incentivizes fund managers to perform as their incentive is tied towards the profit of the fund. However, their losses are not shared.

1Broker had an awesome system. BTC collateral only (no fiat), great UI, a reasonable 2% tax on the profits of copiers, with trade owners receiving 1.5% of generated profits: https://1broker.io/?c=en/content/copy-trader

I think small commissions like this are high enough to incentivize good traders but low enough to generate an active social trading community. Nobody wants to pay 30% on their profits because even good traders lose 40% of the time. That's not viable for copiers.

eToro offers copy-trading functionality for crypto markets, though I haven't tried it: https://www.etoro.com/en-us/copytrader/

They apparently don't charge anything either, which is hard to believe. I don't understand how they incentivize the trade owners.

How much will copy trading cost me?

There is no additional charge for copying another trader or traders. You will still be charged spreads on the trading and/or transaction fees where applicable.

So yeah, bring back a system where traders can monetize copy trading. I'm interested, but a 30% take is way too much.

[panganib999]

Bit too big don't you think? It's heavily biased on the side of the one being followed, though IT is his trading style that is being copied, but still. Around 20% should do, cause if you actually had a lot of followers, in addition to winning with your trading idea, profit from the trade you yourself made is still made. In a sense, copy-trading platform users are also risking their money towards your idea, so taking 30% is a bit too much.

Also note that there are already quite a few copy trading platforms in the crypto space out there. Crypto has been out for 10 years after all. These platforms don't charge any to their followers, so creating a platform with a hedge fund should provide more benefits compared to these, so that users and traders could actually be enticed into joining or using the said platform.

[ShopemNL]

Double post

https://bitcointalk.org/index.php?topic=5208800.0

[Harlot]

Good idea bad rate for sharing profits. 30% is too much considering that the "follower" still needs to pay their taxes after you cut in with their profits. If you are saying that 30% is ideal since hedge fund managers are doing it then you're wrong. The crypto industry is not the same as where the hedge fund are investing their money in, traders/investors in the crypto industry are different compared to the ones involve in the hedge fund most of them are millionaires compared to traders here who aren't. If you really want the crowd to have your attention you must give a reasonable profit cut for your program.

[leowonderful]

eToro offers copy-trading functionality for crypto markets, though I haven't tried it: https://www.etoro.com/en-us/copytrader/

They apparently don't charge anything either, which is hard to believe. I don't understand how they incentivize the trade owners.

According to eToro's site, there's some sort of system that they call 'Popular Investor' (click for direct link on eToro's site to this) where it's possible to get paid a fixed amount per copy from other people once you meet the various requirements that are also listed on the page I just linked. Seems potentially pretty lucrative considering you can get one-time payments on top of a per-copy payment for reaching various levels determined by your total equity, time in a previous level and how many people are copying you, though I have no idea how the rates are per copy.