Not all traders are created equal. Some aim for steady, consistent gains. Others swing for the fences. Understanding risk levels is crucial for successful copy trading.

What Determines Risk Level?

At CopInk, we calculate risk based on several factors:

Leverage used: Higher leverage = higher risk
Position sizes: Larger positions relative to account = higher risk
Drawdown history: Past losses indicate potential future volatility
Trade frequency: More trades can mean more exposure

LOW Risk Traders

Characteristics:

Use 1-5x leverage
Small position sizes (2-5% of account per trade)
Maximum drawdown under 10%
Often swing traders (hold for days)

Best for:

Beginners
Long-term investors
Those who don't want to check constantly
Conservative portfolios

Expected returns: 2-5% monthly (varies)

MED Risk Traders

Characteristics:

Use 5-15x leverage
Medium position sizes (5-15% per trade)
Maximum drawdown 10-25%
Mix of day trading and swing trading

Best for:

Experienced traders
Those comfortable with moderate volatility
Balanced portfolios

Expected returns: 5-15% monthly (varies, with bigger swings)

HIGH Risk Traders

Characteristics:

Use 15-50x leverage
Large position sizes (20%+ per trade)
Can have 30%+ drawdowns
Often scalpers or momentum traders

Best for:

Aggressive traders
Small allocations (money you can afford to lose)
Those seeking high potential returns

Expected returns: High potential, but also high risk of significant losses

How to Choose Your Risk Level

Ask yourself:

How much can I afford to lose? Never risk more than you can lose.
How often will I check? High risk needs more monitoring.
What's my time horizon? Longer = can handle more volatility.
How do I react to losses? If 20% down makes you panic, stick to LOW.

Diversification Strategy

Consider spreading your allocation:

50% in LOW risk traders
30% in MED risk traders
20% in HIGH risk traders (optional)

This balances potential returns with stability.

Setting Stop Losses

CopInk allows you to set a hard stop threshold. If your subaccount drops by a certain percentage, copying stops automatically.

Recommended stops:

LOW risk: 15-20%
MED risk: 20-30%
HIGH risk: 30-50% (or accept total loss)

Final Thoughts

There's no "best" risk level. It depends on your goals, experience, and psychology. Start conservative, learn how copy trading feels, then adjust as you get comfortable.

The key is matching your risk tolerance with the traders you copy. Don't chase high returns if you can't stomach the volatility.