You open a copy trading platform. The homepage shows:
- "Top Trader: +280% annual returns!"
- "45,000 copiers trust this trader!"
- "5-star rating from satisfied users!"
What they don't show:
- Sharpe Ratio: 0.6 (terrible risk management)
- Maximum Drawdown: -58% (catastrophic)
- Leverage: 20x (ticking time bomb)
- Probability of survival beyond 2 years: 15%
This guide reveals what platforms hide and how to find the truth.
What Platforms Hide (And Why)
1. Sharpe Ratio
What it shows: Risk-adjusted returns (the most important metric)
Why platforms hide it: Most popular traders have Sharpe <0.8 (bad). Showing this would expose them as risky.
What they show instead: Raw returns (looks impressive but meaningless)
2. Leverage Usage
What it shows: How much borrowed capital the trader uses
Why platforms hide it: High leverage (10x+) is dangerous. Users would avoid these traders.
What they show instead: Nothing (completely hidden)
3. Volatility (Monthly Standard Deviation)
What it shows: How bumpy the returns are month-to-month
Why platforms hide it: High volatility means panic-selling. Users would realize the trader is chaotic.
What they show instead: Smooth charts (visual deception)
4. Losing Months Highlighted
What it shows: How many months the trader lost money
Why platforms hide it: 30-40% losing months is normal, but sounds scary. Users would avoid them.
What they show instead: Cumulative returns only (hides individual losses)
Platform Transparency Scorecard
| Metric | eToro | Bybit | CopyTrader |
|---|---|---|---|
| Sharpe Ratio | ❌ Hidden | ⚠️ Sometimes | ✅ Prominent |
| Maximum Drawdown | ⚠️ Basic | ✅ Detailed | ✅ Detailed |
| Leverage Disclosure | ❌ Hidden | ⚠️ Estimated | ✅ Shown |
| Volatility Metrics | ❌ Hidden | ⚠️ Basic | ✅ Full |
| Default Sort | ❌ Copiers | ⚠️ Returns | ✅ Sharpe |
How to Find the Truth on Any Platform
Step 1: Look for Sharpe Ratio
If it's not shown prominently, the platform is hiding something.
Action: Download monthly returns data and calculate it yourself (takes 2 minutes in Excel).
Step 2: Check Maximum Drawdown Details
Don't accept a single number. Look for:
- When did the worst drawdown happen?
- How long did recovery take?
- Was it a single event or recurring?
Step 3: Estimate Leverage Usage
If returns are +150% annually with -60% drawdown, leverage is probably 15-20x.
Rule of thumb: Return × 10 ÷ Drawdown = Approximate Leverage
Step 4: Use Independent Analysis Tools
Some platforms (CopyTrader, some crypto exchanges) provide full analytics. Use them.
If your platform doesn't provide this, consider switching.
Key Takeaways
Continue Learning
Sharpe Ratio Explained
Understand the hidden metric
Maximum Drawdown Explained
Understand what platforms hide
