that is correct 4 losses in a row and you are toast. dont forget you can also devise your own scaling system. so for example you could trade 0.375% (R) risk to begin with in the combine. once you have made a 4R cushion you can use this to change up to 0.75% risk. this would give you 8 full stop outs. personally i dont fear stop outs. When do i plan to start? I currently trade my own account but I am very interested in trading OPM. I may have news for you on this shortly.
Just for clarification, I am not aware of the actual specifics of the backer's account. I recently spoke to a trader who used to work the back office in a prop firm. He said if the backer has the "master" account and several traders, the backer could face possible maintenance risk. A prop firm with several traders allocates buying power from one general pool, and thus would not have to provide the maintenance capital for each trader individually. Regardless, the trader has no capital outlay in the live account in the Top Step model, and thus has basically no risk. The rare exceptions are cases where the backer's FCM goes bust while the trader maintains a cushion (e.g. MF Global), or if the backer is unable to allocate enough capital for their aggregate maintenance equity and has to voluntarily cease operations.
amen to that. Prop is all about custom margining. Its quite amusing that some posters are saying that Topstep has very little money at stake. Do they think that backers at other firms somehow allow you large losses. Then there are the people who say Topstep is a scam as you can open an AMP account and keep 100% of the profits. The psychological benefit of knowing you have no downside is huge for the trader. If you posted up just the margins yourself you would have huge leverage and that would create psychological pressure.
I decided to start a 10 day $150k combine Monday of this week. 4 Days traded so far and I have already met the $9k profit objective with $10k profit to date. See metrics attached. I am happy with the 52% strike rate and 3.53 win/loss ratio over the 50 trades made so far. I had to modify my normal style to take more trades than i normally do, this was simply because I didn't want any variance to take me out. I am not going to 'bat out' the remaining 6 days as it's not in my psychology to do that. Will probably now have fun trading it out now I have a cushion. Of course the naysayers say its better to trade your own account. I have been trading my own account and the combine simultaneously, no reason you cant do both and that kind of negates that argument. Personally I took the combine (my first) as I want to transition from trading my own account to trading OPM. I am planning to use all my trading with TST as a track record to negotiate a larger account size with them or another backer. The bigger picture for me is to trade a much larger account and TST could potentially offer that or serve as proving ground. GT
Nice going on the combine. Yes, the true value of the TST opportunity is on the back end, in order to trade size without any risk of capital, while also maintaining the ability to trade within a structured environment.
Thanks and yes I agree. The opportunity to trade size in a structured environment is nicely put. For me the only reason to trade is to be able to make sufficient income/capital that would dwarf what one could achieve in a high end employed job or running a reliable business. Let's face it all of us are probably doing this to make enough money to hit their number. $1m, $5m, $50m whatever that number is to change our own/families lives and leave a legacy. To achieve these goals you need to trade size and do it solidly for a 3 to 10+ year period. Yes TST earn money from people failing combines. You will hear of people taking 20+ combines and saying 'I am nearly there'. I have 'just turned the corner'. In reality their combine account is probably at best bobbing along around break even, up and down with the variance you would expect of a negative sum random walk. If they do manage to scrape through a combine they will likely later blow up due to lack of real edge. This need to continually take combines is explained by the hope and greed dynamic which is played out over and over again. The trader is hoping they will pass the combine when they should be doing the opposite. i.e. fearing losing their money. There is nothing to stop someone trading in demo for free until they are confident they will pass the combine but people will continue to donate. If you look closely enough this happens in nearly all other endeavours in life. The psychology of trading in a structured environment with enforced risk management should not be underestimated. I wish I had learnt in that environment. I have friends who learned in genuine prop (not pay to play prop) and to be told on day 1 in no uncertain terms what your risk parameters were, stick to them or be fired is a great proving ground. The 'I'll make it back' thoughts are not even discussed in your head, hit your daily loss and you leave the office for the day, no ifs/buts. Compare this to the popular 'pay to play' prop firms where a trader has put up their own capital. Even a tap on the shoulder from a risk manager to say 'that's enough for the day' is often met with aggression/hostility as it's 'my money'. Daily risk limit breached? No problem put a call in to get it unlocked again. All reasons why enforced risk management of funded trading is beneficial. Of course no amount of risk management will give you an edge. For me the best place to find an edge is to look at how and why the masses lose money. By definition the vast majority of methods discussed openly on trading forums/other media is likely to lose you money. This applies to the majority of advice handed out. Think about it. If you have a large pool of traders, the majority of whom lose money then you want to be looking at monetizing that. It's not as simple as taking the other side of a losing traders trade. Losing traders still get it right often enough to keep them playing and keep them coming through the casino doors. GL.
Excellent post. I realize Crispy you are not posting here anymore, but i wonder, are you using trailing stops, move stop to BE or just leave trades running win or lose till the end of the day. Instinctively I knew this too that leaving profitable trades running till the close might bring outlandish winners. The problem I see is what about not letting winner turn loser and frankly i have seen this many times reversals when say 10-16 points turn into BE.
Hey Londonkid, don't keep us hanging here, have you finished your Combine? The way how you started it was pretty impressive, you should be at the LTP by now...
without appearing to be flippant the combine was comfortable. I don't know what LTP is? They asked me to complete the funded trader preparation (FTP), which I am fine with. 2 days into that and well on the way to hitting the target. For the FTP i have have a 3% profit target (half combine target), 60 day time limit, 2% daily loss, 2% weekly loss, 3% max trailing drawdown, 45%+ profitable days, flat on major data and have to follow funded trader scaling plan. GL
FTP and LTP are the same thing, we just call it (and they used to) Live Trader Prep.... Congrats, by the way. Since I like to predict, here it goes: By mid-October, you will be done with TST for various reasons... Prove me wrong!