3.1 Understanding Mirror Trading

Mirror trading is a popular financial strategy where retail investors automatically copy the trades of professional traders or trading algorithms. It has been widely used in forex and crypto markets to give beginners access to expert-level trading performance.

However, traditional mirror trading faces key challenges:

• Centralized Control: Users must trust opaque platforms and cannot verify trade execution.

• Profit Limitations: Copying a trader’s strategy does not guarantee profitability, as markets change rapidly.

• Risk Exposure: Retail users often suffer from improper risk management or sudden strategy failures.