I don't believe so, because we segued here from TST having lost some key selling points, and black swan protection being the biggest one still standing. Whether you see that as useful or overkill depends on your personal life experience. Let's just say mine makes me more cautious than a lot of retail traders, apparently.
Can someone post an example of these black swan events ? I can't think of an ES opengap down larger than 70 points and that was when the markets reopened after 9/11. If $3,500 drawdown per contract bankrupts you then perhaps you are in the wrong game.
Go on, don't let us hanging there.... Anyway, to summarize the black swan protection advantage for TST as BS: 1. In RTH a gap during the day hasn't really happened in living memory (what you couldn't get out of with a relative small loss). It could, but if such a big gap happens, my guess is that your trading account will be the less of your worries and you probably want to run out to buy dry food and ammo. 2. We agreed that if a small gap or meltdown takes you out that is your fault and you were using too much leverage. No need for TST, just use common sense. 3. Downgapping/meltdown can be avoided by taking only shorts. Again, no need for TST. That being said, for other products than the index like oil, gold, whatever the "protection" could work, although I doubt that those gap huge during RTH....
This one bankrupted some traders and some market-maker "brokers": http://www.reuters.com/article/2015/01/16/us-swiss-snb-cap-idUSKBN0KO0XK20150116#bTy2mtqyGfRvBzaQ.97
1. Luckily, TST doesn't let you trade us/swiss currency pairs. So we are still looking for a valid example of RTH gaps. And we would prefer out of the blue ones, not at major new releases... 2. If you think about it, there is a good chance that TST does not protect you from a black swan event after all. Why? There is a chance THEY go out of business at such an event, after all they are taking the risk, but guess what, whose money (profits sitting at TST's account) they are losing with theirs? Yes, that is right, yours. The TST backed trader's profit will also evaporate. So I guess we can eliminate the black swan protection as a TST advantage...
These are actually excellent points. I too have been saying that RTH gaps don't seem to be a concern based on everything I've seen, but I'm hardly an authority on this. But as you point out, there is no guarantee that the company itself won't have a blackswan event and your profits might never get a chance to be withdrawn. If a blackswan event should happen that would cause a retail trader to take a major loss on a trade during RTH, then chances are that a company such as TST would also be in a similar position. Now I guess there is difference between losing money that you don't actually have in your account as a retail trader and losing profits that you don't get a chance to withdraw (clearly the first is worse than the second), but giving away profits to TST year after year if you are in fact a successful trader just so you can maybe be protected by a blackswan event isn't I don't think a good R:R ratio.
I include trader error in my broad definition of the term. Setting an incorrect stop level, not noticing it, getting a phone call and leaving the office without checking again, losing Internet connection without another means to correct it, family emergency without thinking of going to cash, those kinds of things can lead to a negative balance by the time the broker forces a liquidation. Alright why not, we're between friends here. The combination of signing a document I didn't fully understand (endorsing the company debt), with delivering on everything I had promised clients and suppliers culminated in shutting down my business, which took me down with it (bankruptcy). While I don't regret being a man of my word, it's been very costly. It's only been a year since I've lost all traces of the event on my credit records. Bankruptcy laws have since gotten much tougher, as well. So, I'm now strongly adverse to the remotest, minuscule non-zero risk of bankruptcy (i.e. owing 3x my savings to my broker tomorrow morning because I typed an extra zero to my stop level without noticing - let's say something big enough that a payment plan would be unbearable). Mind you I love trading so I'm not entirely risk-adverse, but I don't look at rare bad luck thinking "it only happens to others", I plan for it if I can, and I'm at least aware of it if it's unavoidable. That is black swan protection: your risk is limited to whatever profits you hadn't yet withdrawn in this scenario. Limited risk, that's huge! You don't owe TST a single penny. I see a funded trader account balance there as unrealized profit until it's under my direct control. Good point: I see TST as a possible stepping stone, not a long-term solution. There comes a size (all liquid assets combined) where a complete f*ck-up wouldn't lead to net negative equity, in other words the equivalent of trading without leverage if accounting for everything and not just what's sitting with the broker. All that being said I don't want to come off as a TST fanboy; I have yet to decide whether they'll get my business with their current rules. I'm thinking the time and expense of combines may be better invested looking into trading options.
I am a funded trader for TopstepTrader. I can help answer any questions you may have about the Combine or my experience so far. I am trying to help others become day traders and help them pass the Combine and get a funded account. Let me know what your questions are, thanks guys.
Out of curiosity, if you don't mind me asking, are you already a member of this forum with a different name? It would be highly unlikely that you have found this thread on your first day of reading this forum. I understand why you would want to hide your identity, but without any posting history, your views/help might not be taken seriously given no track record if you know what I mean. On the other hand, its great to actually get a member who says they are a funded trader. If I may therefore ask, what are your stats that you are willing to share? How profitable are you in terms of profits per day or week on average? How many losing days vs. winnings day? What is your win rate?