Signal sellers, copy-trading influencers and paid courses: affiliate incentives, cherry-picked screenshots and auditing a track record

What you will learn

• How signal sellers and influencers actually earn: affiliate commissions, subscriptions and prop-firm resale
• Why screenshots and "monthly results" posts are not evidence
• A five-point audit of a track record: full statement, expectancy, drawdown, sample size, risk per trade
• Which rules apply to copy-trading and signal services in the EU

Explanation

A signal seller sends buy and sell instructions by Telegram or an app, for a subscription or for free. A copy-trading influencer lets followers link their broker account so that trades are copied automatically. A course seller sells education, often bundled with a signal channel. None of these is illegal as such, and some are honest. The problem is the incentive structure, which rewards sign-ups rather than results.

Follow the money

1. Affiliate commissions. Brokers, especially CFD (contract for difference) and crypto brokers, pay introducers a one-time fee per funded account (cost per acquisition, CPA) or a share of the spreads and commissions the client generates (revenue share). Under revenue share the influencer earns more the more you trade. A "free" group that insists you open an account with "our partner broker" is paid this way.
2. Subscriptions. A channel with 2,000 members at €50 per month earns €100,000 per month whether or not the signals work.
3. Prop-firm and course resale. Commissions on prop-firm challenge fees (see the course Prop Firms) and upsells to "mentorship" packages costing €1,000–€5,000.

In the EU, running a copy-trading service is an investment service under MiFID II (Markets in Financial Instruments Directive). The European Securities and Markets Authority (ESMA) confirmed in a 2023 supervisory briefing that such services need a licence and must apply suitability or appropriateness tests, disclose costs and manage conflicts of interest from the traders' remuneration. Anyone publishing buy and sell recommendations must also follow Article 20 of the Market Abuse Regulation (see lesson 2). Many Telegram channels ignore all of this.

Why screenshots prove nothing

A screenshot shows one trade, not the losing ones. "Monthly results" images are typed in by the seller. Demo accounts look identical to real ones, and some influencers run several accounts with opposite positions and show whichever won. The only acceptable evidence is a complete, time-stamped statement of every trade over a long period, ideally read directly from the broker account by a third-party service, and even that can come from a demo account or one with huge risk per trade.

The five-point audit

1. Completeness: every trade, including open losing positions, over at least 12 months and at least 100 trades.
2. Expectancy: average profit per trade = win rate × average win − loss rate × average loss. A high win rate with large average losses is the classic trap.
3. Maximum drawdown: the largest peak-to-trough fall of the account. Compare it with the advertised return: 100% per year with 70% drawdown is a coin flip, not a skill.
4. Risk per trade: if single trades risk 10–30% of the account, the record is a lottery ticket that has not yet lost.
5. Costs for the copier: subscription, spread at the partner broker, slippage between the leader's fill and yours, and position-size mismatch when the leader trades €200 and you trade €20,000.

Worked example

Hypothetical example: a signal channel advertises a "70% win rate" and posts screenshots of winning trades. You obtain the full statement for the last three months: 60 trades, 42 winners, 18 losers, average winner €80, average loser €250. Assumptions: no subscription fee, spreads or taxes included.

1. Win rate = 42 / 60 = 70%. The advertised number is true.
2. Total won = 42 × €80 = €3,360. Total lost = 18 × €250 = €4,500.
3. Net result = €3,360 − €4,500 = −€1,140 over 60 trades.
4. Expectancy per trade = 0.70 × €80 − 0.30 × €250 = €56 − €75 = −€19.
5. Break-even win rate for this win/loss size = €250 / (€80 + €250) = 75.8%. The channel needs almost 76% winners just to reach zero before costs.

Add a subscription of €49 per month (€147 for the quarter) and the follower is down about €1,287. The 42 winning screenshots were all genuine; the selection was the deception.

Common mistake

Practice activity

On paper: an influencer's verified statement shows 120 trades in a year: 48 winners averaging €300 and 72 losers averaging €110. The account started at €10,000 and the largest drawdown was €3,800. Calculate win rate, net result, expectancy per trade, the drawdown as a percentage of the start balance and the break-even win rate. Then decide whether the "40% win rate" that a critic quotes is a reason to reject the record.

Key takeaways

• Signal and copy-trading sellers are mostly paid by brokers per sign-up or per trade volume, so their interest is your activity, not your result.
• Screenshots and live videos are not evidence; only a complete statement over 100+ trades and 12+ months is.
• Audit expectancy, maximum drawdown, risk per trade and copier costs; a 70% win rate can still lose money.
• Copy-trading is a licensed MiFID II service in the EU; an unlicensed provider has already shown how it treats rules.

Next step

The next lesson covers the most damaging fraud of recent years, the crypto "pig-butchering" scam, stage by stage with the warning sign at each step.