> ## Documentation Index
> Fetch the complete documentation index at: https://docs.frenflow.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Copy Trading Risks

> Understand the risks of copy trading on FrenFlow. Slippage, liquidity, leader behavior, and how to protect yourself.

## <span style={{color: "#baf820"}}>Copy Trading is Not Risk-Free</span>

Copy trading automates trade execution, but it doesn't eliminate risk. Understanding these risks helps you configure your settings and choose leaders wisely.

## <span style={{color: "#ef4444"}}>Key Risks</span>

### Price Slippage

When a leader trades, FrenFlow copies the trade seconds later. In that time, the price may have moved — especially in trending markets.

| Scenario                             | Impact                       |
| ------------------------------------ | ---------------------------- |
| Leader buys at 50¢, you copy at 52¢  | You pay 4% more per share    |
| Leader sells at 70¢, you copy at 68¢ | You receive 3% less proceeds |

**Mitigation:** FrenFlow has built-in slippage protection. If the price moves beyond your configured threshold, the copy is skipped or placed as a limit order instead.

### Low Liquidity Markets

Some markets have thin orderbooks. When a leader trades a large amount, your copy may:

* Get a worse price (slippage)
* Only partially fill
* Fail entirely if there's no liquidity left

**Mitigation:** Set a **max stake per trade** in your [copy trading settings](/copy-trading/settings). Avoid copying leaders who trade primarily in low-volume markets.

### Leader Behavior

Leaders are real traders — not managed fund managers. They may:

* Make emotional or impulsive trades
* Change their strategy without notice
* Have a losing streak after a winning period
* Trade in markets they don't understand

**Mitigation:** Diversify by following 2–3 leaders instead of going all-in on one. Review their recent performance regularly.

### Timing Differences

Your copy trade executes after the leader's trade. In fast-moving markets (breaking news, event outcomes), this delay can mean:

* Entering at a significantly different price
* The market resolving before your order fills

**Mitigation:** FrenFlow's [zero-block technology](/copy-trading/zero-block) minimizes this gap to seconds, but it can't eliminate it entirely.

### Fee Impact

You pay [trading fees](/trading/fees) on every copy trade, just like manual trades. If a leader makes many small trades, fees can add up and erode your returns.

**Mitigation:** Monitor your net P\&L (after fees) in [Portfolio](/portfolio/pnl), not just the leader's gross performance.

## <span style={{color: "#baf820"}}>How to Protect Yourself</span>

<CardGroup cols={2}>
  <Card title="Set Max Stake" icon="shield">
    Limit how much each copy trade can spend. Prevents a single trade from using too much of your balance.
  </Card>

  <Card title="Use Percentage Mode" icon="percent">
    Instead of fixed amounts, copy a percentage of the leader's trade size. Scales with your balance and the leader's conviction.
  </Card>

  <Card title="Monitor Weekly" icon="calendar">
    Check your copy trading P\&L weekly. If a leader is underperforming, pause or unfollow them before losses compound.
  </Card>

  <Card title="Keep a Buffer" icon="wallet">
    Don't allocate 100% of your balance to copy trading. Keep a buffer for manual trades and to absorb drawdowns.
  </Card>
</CardGroup>

## <span style={{color: "#baf820"}}>Past Performance</span>

<Warning>
  A leader's past performance does not guarantee future results. Prediction markets are inherently uncertain — even the best traders have losing periods. Only copy with funds you can afford to lose.
</Warning>