Anyone Tried the 60 Day Trading Gauntlet from Earn 2 Trade?

Discussion in 'Educational Resources' started by Illini Trader, Jun 19, 2018.

  1. A couple of questions:

    1. What futures commission rate (including fees) is figured into the Guantlet test and is that rate typical of what would be paid in a funded trading account?

    2. In a funded account say 25K -- Would a trader be expected to apply proper money management to that trading amount or has the firm already done that by the amount they allocated. In other words, would they consider it prudent for the entire entrusted amount to be used for margin in futures trading?

    3. Approximately what percentage of Gauntlet takers pass the test? I know you said most fail it but I am really curious on this.

    4. The percentage paid to the trader -- Is that considered professional self-employment income?
     
    Last edited: Jun 22, 2018
    #11     Jun 22, 2018
  2. Earn2Trade-Ryan

    Earn2Trade-Ryan Sponsor

    Hey,

    1) Unfortunately our current data provider for futures (CQG) does not provide a way to mimic commissions directly in the account. This means that currently, while slightly unrealistic, it's even easier for clients to pass the Gauntlet as they don't have extra fees to pay. We are changing our data provider at the end of this month and the new one does offer a way to include these fees, which is great. However, on FX accounts, it's standard OANDA commissions (both live and sim). On live futures accounts, Helios's FCM will typically give commissions based on volume of trading. It can be anywhere from $0.50-$1.60/contract/side.

    2) Yes and no. Of course Helios wants to see proper risk management applied as the trader did in their Gauntlet, but the whole amount is absolutely available to use as margin. That said, the offer will stipulate what the max allowed drawdown is. It's typically 20-50%.

    3) As we are relatively new, the stats are a bit skewed still. About 20% pass.

    4) We are not tax advisors so please check with your CPA on this but in most situations no. Unlike others, Helios actually makes the trader a limited member/parter of their trading firm. This means that at tax time, the trader receives a K1 statement where the trading PNL passes through with the normal benefits. For instance, on Futures, it's the 60/40 capital gains as normal. This sort of income is not normally subject to SE tax. With many other prop firms in this space, you're actually a 1099 contractor and thus all of the income is reported as ordinary income and is subject to SE tax. Not on this but based on conversions with our legal and the NFA, the 1099 setup has some major regulatory issues. The Helios setup does not.

    Please feel free to let us know if you have any other questions and of course we're available via phone and chat on our website as well!
     
    #12     Jun 22, 2018
    Illini Trader likes this.
  3. What is the percentage gain record for the Guantlet?
     
    #13     Jun 22, 2018
  4. Earn2Trade-Ryan

    Earn2Trade-Ryan Sponsor

    14% so far
     
    #14     Jun 22, 2018
  5. Lukas V

    Lukas V

    I don't understand how it works. I'm must be missing something, somewhere along the line.

    You're charging more than twice as much for your "Gauntlet" as TopStep charges for the equivalent Combine.

    Your pass-rate on the Gauntlet is lower than their Combine pass rates.

    Your Gauntlet takes 60 days, whereas a Combine can be far shorter.

    You say only that successfully funded traders can get an "up to 80%" profit share, depending on how they've done in the Gauntlet, whereas all TopStep funded traders get 80%, after getting 100% of the first $5,000 profit.

    In the long run, how can you hope to compete with them, on this basis?
     
    #15     Jun 23, 2018
  6. A huge advantage to Helios is that the 80% profit is passed to you as a futures profit and taxed at the 60% long term gain and 40% short term gain in the US. At Top Step you are an independent contractor and not only pay ordinary income tax rates but are also subject to self-employment taxes. That is enormously significant.
     
    #16     Jun 23, 2018
    tyro, ElectricSavant and Pekelo like this.
  7. Earn2Trade-Ryan

    Earn2Trade-Ryan Sponsor

    Hey Lukas,

    1) You're charging more than twice as much for your "Gauntlet" as TopStep charges for the equivalent Combine.

    It's not really Apples to Apples. If you compare the equivalent live accounts of $150k from them and $25k from our partners, you actually get pretty much equal for less up front. Once you're funded you can only trade a maximum of 3 contracts from the start until you've profited more. That's really about $18k or so in full margin. Then, you're allowed to lose $4500 in a trailing drawdown, and $3k in a daily/weekly loss limit. You also have limitations to your trading such as during news and permitted times. They charge $375/month, and The Gauntlet is $349/60 days. On the $25k, you can use the entire full margin (could be over 10 contracts with certain markets) and trade whenever you want. On the Gauntlet, you could potentially all but wipe your account and make it back and still pass. If you make it to a live account, you're typically given an offer of up to 20-50% drawdown, which could be significantly higher than $4500. Not to mention there aren't typically daily/weekly loss limits.


    2) Your pass-rate on the Gauntlet is lower than their Combine pass rates.

    It's not our place to comment on their pass rates, but they've been around for far longer than we have and have had more people pass through their combine, thus their stats have had a chance to average out. As you know with most statistics, the more data you pass through it the more accurate it becomes.


    3) Your Gauntlet takes 60 days, whereas a Combine can be far shorter.

    The Gauntlet model is meant to judge how a trader trades based on their own criteria. In order to gauge whether or not a trader is being consistent to their trading style, our partners felt that they would require a 60 day report to examine and identify success.


    4) You say only that successfully funded traders can get an "up to 80%" profit share, depending on how they've done in the Gauntlet, whereas all TopStep funded traders get 80%, after getting 100% of the first $5,000 profit.

    Our prop firm partners recognize that every trader is different and thus deserves a different offer. This is why we give our traders freedom to trade the way they trade, and do our utmost to reduce limitations placed on their trading style. Just like when you go into a job interview, you know the salary and offer range but based on your knowledge, experience and how you interview, you'll be offered and can negotiate something different.

    Few other key things to note:

    - Data fees. With most of our competitors you have to pay for your own data directly. With our partners, you can elect to have the fees come out of your account balance thus not directly costing you any money.

    - Taxes. Our partners actually make the trader a limited member/partner of their trading firm. This means that at tax time, the trader receives a K1 statement where the trading PNL passes through with the normal benefits. For instance, on Futures, it's the 60/40 capital gains as normal. This sort of income is not normally subject to SE tax. With many other prop firms in this industry, you're actually a 1099 contractor and thus all of the income is reported as ordinary income and is subject to SE tax. This can amount to SIGNIFICANT TAX SAVINGS.

    - Regulatory Issues. Based on conversations with our legal counsel and the NFA, the 1099 setup most other competitors offer has some major regulatory issues. The setup our partner firms offer does not. For instance, the definition of a CTA is verbatim:

    "A commodity trading advisor (CTA) is an individual or organization that, for compensation or profit, advises others, directly or indirectly, as to the value of or the advisability of trading futures contracts, options on futures, retail off-exchange forex contracts or swaps."

    So, from our understanding, if you're a 1099 contractor to a prop firm, they are your client/customer and you're given a POA over their account. Thus, you likely fit the definition of a CTA. Some may say that you could fall under a CTA exemption, specifically the exemption in CFTC 4.14 that states, "Advice was provided to 15 or fewer persons during the past 12 months and the entity does not generally hold itself out to the public as a CTA". However, the moment you or anyone else (like the prop firm) talks about how you're a funded trader for them, you could be holding yourself out as a CTA, thus the exemption doesn't apply. Assuming it did apply, if funded traders in other programs don't file their exemption and they're acting as a CTA, they're violating regulations. Our founders are NFA members and principals of a registered CTA, thus do everything they can to make sure the regulations are followed.

    Hope this answers your questions!
     
    #17     Jun 23, 2018
    tyro and Illini Trader like this.
  8. Earn2Trade-Ryan

    Earn2Trade-Ryan Sponsor

    Absolutely, the more you make the more you could save!
     
    #18     Jun 23, 2018
  9. kj5159

    kj5159

    Ryan,

    Is Earn2Trade and Helios Trading affiliated with the private equity firm Helios Investment Partners?

    Also, I realize everyone and every situation is different and Earn2Trade seems intent on being flexible based on people's different styles etc. but assuming one passes the Gauntlet, how long would the period be between that time and when a trader might be up for review to potentially increase their capital allocation? Just ballpark.
     
    #19     Jun 23, 2018
  10. Earn2Trade-Ryan

    Earn2Trade-Ryan Sponsor

    There is no relation to Helios Investment Partners.

    A trader can speak with the prop firm about a capital increase at any point they wish. While there is no required waiting period, they do generally suggest waiting a month between requests for an adequate display of performance.
     
    #20     Jun 23, 2018