Hi all, Apologies if this have been discussed to death already, but are there any programs/companies available today which are worthwhile for an independent futures trader to gain access to extra capital? I'm currently trading my own account with some success, but I realize that it would/could benefit me to trade a larger account. For now, my objective would be to trade this alongside my own existing account. Back in the day when this first came to be, Topstep Trader was the only company around, but it seems like there's quite a few others too now? I'm not even aware of them all. TST did receive a lot of criticism from some people back then on simply being a company which collected Combine fees without any true intention of actually backing traders. Of course, there were positive comments too, but I'm not sure I ever read anyone on ET associated with any of these firms that actually were funded and extracted profits from these company. Not sure if this has changed since...? That may of course not reflect badly on these companies, but merely illustrate how difficult futures trading is. Would appreciate input on both if it it's wortwhile considering at all and if so - which company is the best option for a futures trader anno 2020. Thanks in advance! Best regards. Howard
Based on my limited time on this forum, I already know you'll get responses ranging from TST is a scam to TST is awesome. I'm in a TST combine myself, and so far so good. I did a fair amount of research before jumping in myself. I've heard of plenty of funded traders, and withdrawing funds. It does sound though like the success rate is small, and that's where a lot of the "TST is a scam" talk comes from, when I think most of that is really people just couldn't stick to the rules and pass the combines. I can only guess but I'd say easily less than 10% of the people who sign up make it to funded, and probably have plenty of resets. Again my impression is they are just trying to do the slot machine model, and hail mary it and try and beat the combine as quickly and easily as possible, and that's where it's catching them and they have to reset. I'm the first to admit that was my approach for 2 resets, then I realized maybe i should take a slow and steady approach, and it's worked out far better. Earn2Trade and SMB Capital seem to be the other 2 main ones that draw attention. I know E2T is active on the forums answering questions, although mainly they just end up getting a bunch of trolls critizing them saying its a scam, when again it's really just that people can't pass their gauntlet, get mad, and fire away online because its easy. The general sentiment I've found for TST people is the ones who pass the combines and get funded stick with them for a little bit, then move onto their own accounts after withdrawing profits from TST because they don't want to do the 80/20 split, which is completely reasonable and exactly what I would do as well. Hope that helps!
Thanks, @jtlexington ! It does help. The way TST was structured initially can make me understand the skepticism. I remember the Combines had quite unrealistic performance goals as there was in fact a time target/limit too. I see that one is gone now. May I ask which Combine you’re doing? I have some other options beyond funded programs, but I may very well give TST a go. Best, Howard
Depending on your trading style one thing to keep in mind is Earn2Trade allows you to intra-day micro mini's at the standard 10 to 1 ratio. From the research I've done other companies do not allow the 10 to 1 ratio, they still consider it one contract. Makes it easier for some people to pass, particularly in this market environment.
No worries, happy to chime in. I'm doing the $50K. 5 lot max, and the few times I burned myself I was going full 5 lot all or nothing style. More mad at myself, spending hours learning, studying, reading books, watching videos, etc. about strategy, then get on my account and hail mary it. Total disconnect between what I knew I should do, and what I did. Then like I mentioned after a few resets I took it more serious, 1-2 lots max, slow and steady, and it's all good. That's where I look at TST as a good learning opportunity, stick within the rules which I believe are reasonable and there's a reward at the end.
sure they give you capital, but you have rules, restrictions on what you can trade. that is the proprietory trading model. as for trading other people's money, it's trust and you may need to be registered with regulators. too much fraud. people making BS trading claims and Bs investements.and then disappear after you send them money or declare bankruptcy you know. I think they do criminal record check and backgroundcheck on you first. you know walmart does background checks,criminal record check and etc to work for min. wage you know that right. it's not that they don't trust your trading they don't trust you from going insane one day and do a fat finger something or take the money and run. and not return their capital.
You would do a limited power of attorney giving you access to trade someone else's account (assuming everything else is in check of course, regulations etc or whatever else you may or may not need to have set up). You should never wire someone money to trade. It should be in your account therefore any withdraws will come to your bank. Of course trust still comes in that the person will trade it properly that is true, but they cannot steal your money, but they certainly can lose it or fat finger.
sure they can, wash trading to generate commissions on client accounts. wink wink it's illegal. power of attorney? the guy can withdraw and deposit money into your account and do as many discretionary trades like buy worthless shell companies and claim as 'losses' or embezzlment of client account. give anyone power of attorney in your account the person can do whatever they want with your account withdraw money, deposit money. that is what power of attorney is .instiutions its usually a 'lawyer' and lawyers have insurance against 'malpractice' and financial advisors are 'insured' for fraud too... unless is a personal lawyer or registered fund manager. etc.or relative or family. etc. and that is same thing ,you have to trust the guy. or girl.
In my opinion none of the companies that fund traders if they pass tryouts are "scams" they are just very intelligent and lucrative business models for the owners but from a trader (customer) perspective however what you do need to do is look at the real math of the value proposition in a straightforward manner and if you choose to move forward at least you have a full understanding of the math and what exactly you have the possibility of getting back in the way of risk capital funding should you indeed pass the tryout and get a funded account with the same math parameters as the tryout account First with many companies the tryout sizes are marketed as $25,000, $50,000, $100,000, $150,000 - etc - nothing wrong there--they can certainly call the tryouts by whatever title or name they want for marketing purposes to catch your interest but please remember these tryout accounts are just virtual currency and the real funding to trade against on the tryout account is a) your max daily loss limit b) your max weekly loss limit (if applicable and if it is a higher number than the daily loss limit) c) your trailing max drawdown amount so as an example on a $50K Topstep Trader tryout the daily loss limit is $1,000, the weekly loss limit is $1,000 and the trailing max drawdown is $2,000 $1,000 and $2,000 ---That is the amount you are actually trading with (not $50K) because if you violate the $2,000 trailing max drawdown you fail. If you violate the $1,000 daily loss limit you fail. Same thing if you are funded (with the same math loss parameters as the tryout--which in most cases is the case at least at the start) - their risk capital on that particular account is maxed out at $2,000 (not $50K) - you start of day 1 in a funded account and lose $500 you have not violated the daily loss limit but you have lost $500, then day 2 you lose $600--well you didnt violate the daily loss limit of $1,000 but you did violate the weekly loss limit of $1,000 since you lost $500 on day 1 and $600 on Day 2 - you fail and your funded account is closed - their loss is $1,100 in risk capital against any tryout monthly fees you paid to them before passing the tryout and getting a funded acct (and any reset fees you may have paid to them before passing the tryout and getting a funded acct). Lets say you only lose $100 per day starting day 1 - so obviously you never violated the $1,000 daily loss limit and there are 5 trading days a week so losing $100 a day for 5 days is $500 so you haven't violated the $1,000 weekly loss limit either. So for the fist month you lose $100 per day for the 1st 20 trading days and in total you lose $2,000 - you fail and your funded account is closed. Their loss is $2,000 in capital against any tryout monthly fees you paid to them before passing the tryout and getting a funded acct (and any reset fees you may have paid to them before passing the tryout and getting a funded acct). Now lets say you start making profits day 1, in fact you never lose money on any trading day ever. You make $100 a day on average and at the end of 20 trading days you have $2,000 in trading profits. You make a withdrawal request for $2,000 and Topstep allows you to keep the 1st $5,000 at 100% and they send you $2,000 minus any applicable ACH or wire fee and your funded account is still closed--yes that is right your funded account is closed because you have violated the trailing max drawdown as you withdrew your $2,000 in profits and your account balance is now $0 (not $50,000) and because your account balance is zero you no longer have any trailing max drawdown amount left to trade against - meaning their is no risk capital left in the account despite the fact that you never had a losing day and only withdrew the profits. so nothing wrong with any of the above - its just many prospective traders just dont take the time to look at the entirety of the math of dollars they pay in VS the true risk capital that they can possibly get back in return should they pass the tryout and also how exactly the math works on a funded account should you actually want to make a withdrawal of profits
Ok, the confusion is partially my fault but also I am not going to debate this. I don't think this guy is setting up a hedge fund anytime soon, so him trading to generate commissions or due wash trading isn't going to make him any money. He would likely have to generate profits on the account to get paid. Also you can just use a third party trading authorization form, as opposed to limited power of attorney(I never said POA just limited POA there is a difference), but none the less you are correct third party authorization would be the proper way to go, which would allow someone to ONLY trade your account. With that limited authority they could not withdraw funds or add funds to your account. Even if they could request a withdraw with most (if not all brokers) the funds will be sent to the bank account that initially funded the account anyways. Yes, I agree with the trust thing, but I don't necessarily understand that comment. Of course you have to trust someone, isn't that a given? People, hedge funds and etc trade other people's accounts all the time. You have to have a certain level of trust for any type of business transaction anyways.