Editing Copy trading

**Copy trading** is replicating another account's trades, manually or automatically. In [[Solana]] memecoin trading it means mirroring wallets labelled "smart money" or [[KOL]] wallets through bots and terminals that buy and sell when the tracked wallet does.[^1]

## History
Retail copy trading began on forex and CFD brokers; Finance Magnates dates the copy and social trading market to 2010.[^2] The European Securities and Markets Authority published a supervisory briefing on copy trading services on 30 March 2023 to strengthen investor protection under MiFID II.[^3][^2] In memecoins, tracking platforms such as [[GMGN]] highlight wallets and offer one-click tools to replicate their trades; Luo et al. call copy trading "the dominant entry strategy in meme coin markets".[^1]

## How it works
Copiers choose wallets they perceive as having insider knowledge, skill or consistent profits, judged from public on-chain history, and a bot submits matching swaps after each trade by the leader.[^1] Because the copier buys after the leader and adds its own price impact, Luo et al. found copier returns "consistently lower" than those of the wallets copied.[^1] Telegram bots that hold users' private keys add custody risk: the Solareum bot shut down in March 2024 after about $523,000 in SOL was drained from more than 300 users' wallets.[^4]

## Manipulation
Luo et al. catalogue bots that target copiers: [[Bundling|bundle]] bots that hide a creator's position, [[Sniping|sniper]] bots that buy in the first blocks and exit once copiers follow, bump bots that inflate activity with offsetting trades, and comment bots that fake engagement.[^1] Their manipulation-resistant model averaged about a 3% copier return per meme coin investment, while the best statistics-driven baselines lost money.[^1] Copy trading is widespread in the [[Trenches|trenches]].

## Timeline
- 2023-03-30: ESMA publishes supervisory briefing on copy trading[^3]
- 2024-03: Solareum Telegram bot shuts down after user wallets are drained[^4]

## See also
- [[Axiom]]
- [[Photon]]
- [[BullX]]
- [[Trojan]]
- [[Moonshot]]
- [[DEX Screener]]
- [[Jito]]
- [[Glossary of trenching terms]]

## References
1. [Resisting Manipulative Bots in Meme Coin Copy Trading: A Multi-Agent Approach with Chain-of-Thought Reasoning](https://arxiv.org/abs/2601.08641), arXiv (WWW '26), 2026-01-13
2. [ESMA eyes copy trading, stronger investor protection](https://financemagnates.com/forex/esma-eyes-copy-trading-stronger-investor-protection), Finance Magnates, 2023-03
3. [ESMA provides guidance for supervision of copy trading services](https://www.centralbank.ie/regulation/markets-update/article/markets-update-issue-6-2023/european-securities-and-markets-authority-(esma)/esma-provides-guidance-for-supervision-of-copy-trading-services), Central Bank of Ireland, 2023-07-03
4. [Solana Telegram trading bot shuts down after users drained of $523K](https://decrypt.co/224371/solana-telegram-trading-bot-shut-down-users-drained-523k), Decrypt, 2024-03