Following Wallets ≠ Following Profits

You find a wallet on Solana that made +120% in the last 7 days. It looks like magic.

So you follow them.

But a week later, your portfolio is flat — or worse, red.

Sound familiar?

Welcome to one of the biggest traps in DeFi: assuming recent success equals future edge.

Let’s unpack what’s really happening when you follow wallets — and how to use smarter mental models to copy trade with clarity, not hopium.

Concept Breakdown:

1. Wallet Performance is Not a Strategy — It’s an Outcome

Many wallets that go parabolic in the short term are actually high-variance, short-lifespan actors: snipers, pumpers, meme coin betters. Their ROI looks great right now — but that doesn’t mean it’s repeatable or copyable.

Just like in poker, a winning hand doesn’t always mean a winning player.

In trading, what matters is consistency under uncertainty — not raw numbers from lucky streaks.

2. The Copy Trading Formula: (Alpha – Friction) × Mirrorability

Let’s break that down:

Alpha: Does the wallet actually have skill or an edge? Measured in expectancy, not just ROI.
Friction: Slippage, latency, fees, timing gaps, asset illiquidity — everything that eats into copy potential.
Mirrorability: Can you realistically reproduce their trades? Do they use bots? Do they snipe memecoins within 3 seconds of launch?

Even a great wallet becomes uncopyable if it trades too fast or too illiquid.

3. Win Rate vs. Expectancy

Many traders fall into the “high win rate = good” fallacy.

But win rate alone is useless without expectancy:

Expectancy = (Avg Win × Win Rate) – (Avg Loss × Loss Rate)

A trader with a 90% win rate but small wins and huge blowups is far worse than a 50% win rate trader who cuts losses and lets winners run.

Wallets with high volatility and asymmetric trades may look “messy” — but over time, they compound better.

Actionable Mental Models:

“Would I have realistically copied this?” — Check trade frequency, deltas, gas use, token depth.
“Is this repeatable or just recent?” — Look at the duration, not just ROI.
“What’s my friction?” — Know your execution delay, bot setup, fee exposure.
“What happens in a drawdown?” — Can you hold on, or will you panic-exit?

Takeaway:

Copy trading is not about finding the “hottest” wallet.

It’s about identifying repeatable behavior, managing execution drag, and understanding the psychology of following someone who might hit a cold streak.