TST is running a scam with the "first $5,000 belongs to the trader". There's absolutely nothing at the website that indicates that an account would be closed if that $5,000 was withdrawn. Thank you for the clarification. I think this is an issue for the CFTC.
The statement is basically true--the 1st $5,000 belongs to the trader either way even if they close your acct but I agree that they need to clarify (or at least emphasize more) how the trailing drawdown works in the funded account ---if I had to guess I would say that it probably is on their website somewhere but they dont really explain it in plain english
Well here's a solution: After the account is closed when you withdraw the entire $5,000, have your wife or one of your kids open another account. You trade the account, make another $5,000 and withdraw. Rinse and repeat with different sign ups. If you have 10 signups and they all make $5,000, that's $50,000! I am going to ask the CFTC about this - I know someone there who will review their website.
Here is where it is on their website- https://help.topsteptrader.com/hc/e...ke-a-withdrawal-and-what-is-the-profit-split- -it pretty much says it but doesnt really explain what it means with an example Once the withdrawal request is processed, the Trailing Max Drawdown will be automatically set to the starting account balance (the trader cannot allow the account balance to reach or go below $0 after a withdrawal). How can I make a withdrawal and what is the profit split? Traders can request a withdrawal from their Funded Account® at any time by contacting our team at support@topsteptrader.com. Once a trader requests a withdrawal, we will work with our brokerage partners to remove the funds from the trader’s Funded Account. Once we have confirmation that the funds have been moved at the brokerage, we will begin the transfer process with our banks to disperse the funds. Withdrawals are generally dispersed to the trader within seven (7) business days. We can process withdrawals using the following methods: Checks: We can send any trader a paper check in the mail for the amount requested. Checks sent outside the US will likely take significantly longer than 7 business days, and we do not provide an estimated delivery date for physical mail. ACH Wire: Bank wire available for traders with a US-based bank account (the trader does not need to be a US resident). There is no transfer fee for ACH wires. Standard Bank Wire: Bank wire available for traders with banks based outside the US. Traders living outside the US must submit their bank information using SWIFT format to ensure a successful transfer of funds. For standard wire transfers under $500, a $50 transaction fee will be applied. There is no transfer fee for wire transfers over $500. The standard wire is the quickest and efficient method available to make withdrawals for traders outside the US. We are unable to process withdrawals via PayPal, and we cannot transfer funds from the Funded Account to a personal trading account held by the trader. Traders will receive 100% of the profits from withdrawals, up to a total of $5,000. After the first $5,000 of funds have been received by the trader, the profit split will become 80/20, with the trader receiving 80% of withdrawals and TopstepTrader retains 20% of the requested withdrawal. Once the withdrawal request is processed, the Trailing Max Drawdown will be automatically set to the starting account balance (the trader cannot allow the account balance to reach or go below $0 after a withdrawal).
It looks like Earn2Trade does about the same thing. I just went on their Chat and tried to extract an answer from the person. Practically impossible - clear as mud. I copied the transcript. These companies actually take no risk at all - the traders are funding their own accounts. Totally misrepresented at their websites.
Your wife or whoever is going to open an account with them will need a separate bank account for deposit. Not hard to do. These guys have a nice scam running.
I think they do have it somewhere on their websites --it is just not thoroughly explained in plain english on the websites where most traders can reasonably understand the full ramifications of it--but probably for legal purposes they explain it enough to pass legal muster and thus there is nothing anyone can really do about it---except stop participating in combines and paying them until they make changes to make it more appealing and realistic for making a recurring trading income by allowing withdrawals down to zero and still have your max drawdown to begin trading again
The bottom line is they're not funding anyone. The trailing draw down protects them from loss. If you're in a trade and you hit that draw down, I presume they exit the trade for you so as not to incur additional loss. Not at all transparent.