TESTING
After you find a potentially good wallet or a list of wallets, you can begin testing them. The testing phase is not meant to make money; it's just the next step before really starting real copytrading. You will be able to figure out what fees you need for that particular wallet, if there are other competitors, and most importantly, if the wallet is copiable in the long run.
We suggest creating a new empty wallet whenever you start testing a new one. This way, you will be able to track transactions more easily when you need to fill in the testing sheet. Start with small balances like 0.01-0.05 SOL per trade for a few transactions, and study the PNL differences between your wallet and target wallet.
❗️ If the differences are significant and the ratio between target wallet buys and liquidity is decent, it might be because your wallet is trading volatile tokens, or other wallets are copying it with more efficient bots or higher fees/tips. In this case, check on Photon/GMGN to see if there are competitors and what bots/fees they are using. Based on this, consider increasing fees.
If everything is good, you can slowly scale up your position size (depending on your risk tolerance and SOL balance). Test the wallet for a while. If results are good, your wallet may stay at breakeven. However, due to trade size, you are probably not making money because of fees. Now it's time to find out if fees are the reason or if the wallet is simply not copyable.
To assess this aspect, you need to use the testing template. This template will calculate the projection and simulate the transactions you had but with a higher SOL amount. Moreover, you'll know what profits you'll have with a certain buy amount you plan to use, and also calculate the average performance per day. Use the following Excel file and pay attention to the instructions below:
HOW TO USE
You just paste your data into columns B, C, D, E. Also, in the outcome boxes, you need to input your start and stop days so the sheet can determine the timespan you traded and calculate the daily performance.
Ensure all your data is in the specified columns. Select columns E-H, then drag the corner of the selection down to the last row of completed buys and sells. Repeat for columns K-N.
If you are happy with the performance, it's time to scale up, assuming you have already tested the system. Increase your buy amount gradually, avoiding increasing too much after winning streaks because you will hit a drawdown at some point, wiping out profits made during the small buy phase. You can keep using the testing sheet even after testing is finished to calculate performance on every trading day.
Then, proceed by inputting your profits into the wallet balance sheet, where you can track daily profits and cumulative values. Create a separate sheet for each wallet you copy. This way, you can observe changes in each wallet's performance, helping you decide more easily and accurately if the wallet is worth copying anymore.
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