Probation, decay and trader replacement

Decay is normal; the question is the threshold

A drawdown is not evidence of a broken edge. A strategy with a genuine 55% win rate will produce losing streaks routinely, and a system that ejects leaders on every bad week is guaranteed to sell exactly the traders it should hold.

The threshold problem is therefore two-sided. Too tight and you churn, paying fees to chase the recent past. Too loose and you keep funding a decayed edge while it grinds the basket down. Probation exists to create a middle state instead of forcing a binary.

The three states

A leader is either active, on probation, or removed. Active leaders receive their full score-derived weight. Probation reduces weight and suspends new additions to that leader's exposure while the score is reassessed. Removal closes the sub-account's positions and hands the slot to the highest-scoring qualified candidate.

• Active — score above the maintenance band, full weight applied at rebalance.
• Probation — score inside the decay band; weight reduced, candidate list warmed up.
• Removed — score below floor, or a hard breach; positions closed and the slot reassigned.

Hard breaches bypass the queue

Some failures are not gradual. A leader exceeding a risk limit, abandoning position discipline, or trading into liquidation proximity produces a different kind of signal: not weaker evidence, but disqualifying evidence. Those cases trigger emergency replacement rather than probation.

The distinction matters because probation is a statistical judgement and a breach is a rules judgement. Waiting for statistics on a rules violation is how single-leader copy trading turns a bad week into an account-ending one.

Turnover has a price

Every replacement closes positions and opens new ones, and both sides pay fees and slippage. Replacement policy is therefore tuned to be decisive on breaches and patient on variance, because the alternative — high-frequency leader rotation — transfers a predictable amount of your capital to trading costs in exchange for an unpredictable improvement.

Past performance is not indicative of future results. Perpetual futures are leveraged instruments and carry a substantial risk of loss, including the loss of your entire position.