The Value and Danger of Following Other Traders

Traders who have been studying charts long enough tend to learn TA. All good analysts should see the roughly same patterns. You can learn a lot from other people, but you can get rekt following someone blindly.

What I mean is this:

  1. There is a lot of value in following some seasoned traders, they can help you understand chart analysis in new ways and can help you see patterns you wouldn’t otherwise see.
  2. There is only one chart, and thus most skilled traders should see the same patterns. At the end of the day most traders with chops who use the same indicators should mostly see the same patterns. Further, they should all generally err toward being bullish or bearish at the same time (they should at least acknowledge a bear or bull market if we are in one). For example, many saw the inverted head and shoulders in BTC in late December 2018 and accepted that it was a bullish sign despite the bear market. Then, subsequently, when that failed, all good traders should have acknowledged that and updated their analysis.
  3. If you follow someone and take their advice as gospel because they have some good calls, you are missing the point and potentially setting yourself up for disaster. There is no guru, even for the best traders it is a mix of luck and skill.
  4. In general you should learn from others, and study the fundamentals of the technicals, and then apply your own analysis.


  1. Since everyone sees the same patterns, when the obvious patterns play out many people will be right. Meanwhile, those who countertrade those patterns will be right when it doesn’t play out (this can be even more impressive looking than getting the obvious call right). Point being, betting on the favorite or betting against the favorite can make a person look smarter than they are (be cautious).
  2. Probabilities matter. In a world where people are only right sometimes, it can give novices a sense that those who get it right a few times in a row will always be right (or will have a winning streak of greater than 50% over time). However, most traders lose money over the long term. And those who don’t lose money often are doing very specific things that a novice isn’t going to be able to or know to pull off (due to a lack of experience with position sizing and stop losses or time constraints).
  3. You have to adapt; not every popular trader will! If you follow a skilled bear through a bear market, and they stay bearish when a bull market comes, you can end up losing your shirt. Same for a bull in a bear market. Many traders are only skilled in playing one side of a market.
  4. Many people online aren’t fully honest. If you think a trader is great, but they actually make a good deal of losing trades, you could end up finding out the hard way.
  5. If your trading / investing style doesn’t match up with the person you are following, it could end up leaving you disappointed with your end result. A bull who wants to HODL on all the way up who follows a day trader who only sees crypto as a widget for making fiat is bound for disappointment in a bull market. A cash trader might be very excited about making 10% on 1% of their portfolio in an epic bull run in a day, but a HODLer who would have went all-in might break down in tears over the potential gains passing them by (even if they both made the same trade). If you don’t know yourself, you could get in a really messy situation.

Point being, trading / investing is very much something a person needs to do as an individual.

You can find someone who shares your goals, or you can find a fiduciary who will work for you, and pass the torch to them, but if you aren’t very careful in choosing the right mentor for you… you could end up getting “rekt” or end up very disappointed with your outcome.

Something very simple like not being as active or experienced of a day trader as the person you follow can leave you in a really bad place… even if they are making the right calls, they may not work that way in practice for you.

Because of the above, it is in my opinion best to learn from others and then take the reins yourself. Let someone inform your ideas, but do your own analysis and trade/invest in your own style. At the end of the day you still might lose, but at least you’ll lose on your own terms and have a lesson to learn other than “I should do my own TA.”

Author: Thomas DeMichele

Thomas DeMichele has been working in the cryptocurrency information space since 2015 when was created. He has contributed to MakerDAO, Alpha Bot (the number one crypto bot on Discord),...