The business model of Gold's Gym has their "customer" signing over their banking info and a commitment to provide a token monthly payment -- backed by a Byzantine contract separation formula and a well-staffed legal back-office. The "customer" thinks they are buying gym access -- and when they miss a payment, or decide to quit and seek to separate, they discover the reality: Golds will tap them for quite a bundle, while providing nearly nothing. The goal of Golds is merely to entice you to sign up -- "fitness" is completely secondary. Golds business model is about getting you to sign up. You are *volunteering* for contract abuse. These trading gyms (TopStepTrader) are no different -- despite their use of masculine language and titles like TopStep (for those knowledgeable of trading pits) or trading "combine" ("Ooo! Football!") or whatever. It's a ruse to tap your capital vein until you're too faint to pull the needle out yourself. Your capital "fitness" -- like some newsletter that Golds might put out -- has nothing to do with reality: it's only there to encourage you to leave the needle in. You are volunteering for *capital* abuse. What proportion of traders in these shops are successful? 1 in 10? And how much money do the sponsoring shops make from these stars? $40-thou? $50? How much do these shops make from the also-rans? $10k? $20k? Do the math: they do not wish for your success -- they wish only for you to sign up. If you're a "star"?? Your main purpose is not to make money, but to make stories -- the money they accrue through your successful trading is incidental to the draw you create for new blood. Both businesses profit from the same model: find the dream, and tap into its bloodflow.
tommcginnis, Thanks for your comment. The way and how TopStepTrader runs their business, is their business. The objective of the article is to show there are normal day traders making money and beating the odds. In a nutshell, winning.
These trading operations and their ilk (TopStep, Collective2, WealthSignals, etc. etc. etc.) should be much more heavily regulated in terms of their advertising and promotional activities. Sending out newsletters and posting videos highlighting the results of only top traders is no different than putting 100 monkeys in front of 100 trading stations, then picking the winners at a particular point in time. In any large group of traders, there will always be a few distributed at the top, if for no other reason than survivor bias within the set of all traders who have come and gone.
No, their business model is *all* of our business. (Fergawdsakes. ) The "objective of the article" is to show abnormal day traders' short-run returns, as if they were normal. They are not normal; the article amounts to a lie.
tommcginnis, If you are suggesting the article(s) should track the profitable traders trades over time (6 months to x years) to show consistent profitable traders, I Agree with you. TopStepTrader should track their traders over time to see if they are a consistent. I agree.
Noooooo. I'm saying TopStepTrader is a lie. It is a lie, built around a falsehood, and set upon a prevarication. It is Kool-Aid, imbued not with cyanide, but with volunteered bank account numbers -- and no amount of your kind comments on its pretty color changes the degree to which it bleeds its customers in fulfillment of its business model.
Oh HELL yeah. It's like a mountain shop: they're not in the business of getting you out in the woods, but in the business of selling you gear. The issue they have is, the guy with a 50lb pack has 10lbs worth of gear, and 40lbs worth of food, and is gone for 3 weeks. What the newb buys is 40lbs worth of gear -- squeezing in 10lbs worth of food -- and ends up with a 50lb pack for a 3-day weekend. Here's me out for a 3-day weekend. The pack totals about 8lbs, including water. The backpack itself weighs about 7oz. Mountain shops HATE me. https://secure.meetupstatic.com/photos/event/1/d/8/d/600_10267565.jpeg
@tommcginnis, do you think the trading world would be better without these businesses and the opportunities they provide? High failure rate is well publicised and is expected, so nobody is really tricking anyone here.