All good points to weigh and consider before joining TST. As for the annoying $5k capital contribution, the difference is the watermark. Deposit the annoying $5k and the watermark is probably $0. Don't deposit the annoying $5k and the watermark is $5k. That's the way I see it. I think the critical difference however is the business model. TST, unlike other prop lite firms, uses a performance based model. So, if you are making hay you are okay. OMG, I just busted another unintended rhyme. Not sure how strictly they evaluate your hay making ability though. That's the devil in the details. If the criteria they use to evaluate your performance is unreasonable and unrealistic, then TST could be worse than the prop lite firms using the transaction based business model. The way I would go about evaluating a firm is to meet the people at the firm. If you get the heebie-jeebies, high tail outta there even of they offer you a Patek Phillipe watch lol and other perks b/c you gonna get screwed soon or later. As a trader, the most important thing is being paid. How much and how often. You don't want to be in a situation where you are screaming "WHERE IS MY MONEY?" like Cuba Gooding Jr. screaming "SHOW ME THE MONEY!" in Jerry Maguire. Lol. Good prop firms with good traders pay whenever traders ask for a check. I have seen this. Not a figment of my imagination. I don't get the make +X amount in Y days Combine thing. What if I am kick ass trader and I make zero dollars in Y days? I can't trade live? I get no shot? So, Alex Rodriquez has to bat .300 or better in any Y days or he doesn't play for the NY Yankees? Lol.
OK, maybe they changed that rule. Back in the day I used Ninja at Velocity. I got the free 30 days but after that I actually had to open an account. I didn't have to trade the account, but to get the live data, I had to fund it. Maybe they softened up on that. I can't imagine they would let you do that into perpetuity. That data cost them money as does the TT network. As far as whether or not you are backed, according to Michael on Friday, they keep wiping your debt clean every time they restart you. I honestly did not know that and it does not state clearly how many times they will wipe out your debt. I personally would never wipe a traders debt clean. But on the 150k combine, that's 6k a pop. So if they do that 3 times, they are eating 18k in losses.
If you are not required to make up for the losses after being sent back to the combine and make it back to a live status, then that's definitely in favor of the trader. My guess is this must be on a case-by-case basis, and based on the incoming revenues generated by TST vs. the amount of losses the partners are willing to incur. The key is that $5,000 watermark. If a trader makes it well past that phase, then it means the trader is clearly profitable. At that point, there is opportunity cost of not trading your own account and keeping 100% of the pie. This must be weighed against the benefits of being able to scale up the lot size with Patak for the use of more capital while giving up 30%. It's already been asked on this thread regarding the amount of traders who are profitable, and the response was that information is proprietary to the equity partners. Go figure.
Hey Maverick 74 From your experience on both sides of the fence , your opinion talking about pro's , what group has consistently more profitable day traders over the past few years Are there more profitable stock traders or futures traders out there ?
That's a tough question. I think the question better asked is who is making more money now, algorithmic traders or discretionary traders? It appears the algo guys on both the futures and stock side are doing better. Having said that, at one futures prop firm where a buddy of mine works, they have a bunch of point and click guys trading futures and several are up over 7 figures on the year trading crude. I don't know any equity guys up 7 figures this year.
Maverick, Please let us know, these guys who are up 7 figures trading crude: 1) What is their daily loss limit? For Patak 50k account, it is 1k. 2) What is the limit on number of contracts they could trade? For 50k account at Patak, it is 5. 3) What is the limit upon hitting which they are required to not trade live anymore but sent to sim? For Patak 50k account, it is 2k. And please if you don't know the answers, go and ask your buddy to find out. If he is comfortable sharing his and others PL at the firm with you, he will be more than willing to share the risk limits. Reason I want you to answer this question is that I know these numbers will be huge compared to Patak and will act as an eye-opener to the newbies about what "true professional futures trading" is all about. Thanks.
Now to be fair this isn't really a fair comparison. You can't really compare a firm like TST to a futures prop firm operation. When I worked traded at Avatar we had some guys that pulled in some big numbers, and still are doing the same even now. Their risk management was much more lax than anything TST did. TST's risk parameters are meant for more of a novice trader...if you are a top performer at your respective firm usually the firm will give you alot more room in the risk department.
Absolutely, its not fair comparison. My intention is not to attack Maverick with a counter question... I asked this so that it can give some education to newbies in the futures world. That is the only intention behind the question. You will note that I edited my post and moved it away from Maverick to the risk limits that true professional futures traders get. Cheers.
I had to come back to respond because this is such a subtle but excellent marketing gimmick that almost everyone will miss it, if not clarified. The key thing to note is that combine objectives have been designed SO TOUGH that the probability of one guy passing the combine 2 times or 3 times is incredibly small. So, such traders just won't exist. No harm in refunding money to traders who just don't exist. LOL. So, readers if you are with me, please read the below mathematical explanation carefully. Mav, you yourself said that you estimate 99% of first time combiners fail to go live. So, 1% move to live after their first combine. When traders among these 1% live traders lose 2k below initial balance, they are sent back to combine to prove themselves again by re-passing combine. Let us say this time 10% of traders pass combines and go live. The unfortunate live traders who lose again are sent again back to combine. Lets say on this try, 20% of traders move to live. Say on the next cycle, 30% of combiners pass. So, combiners skills are increasing with every try. % of traders who go live, then fail 3 times and go live again = 1%*10%*20%*30% which is 6 in 100,000. Patak loses 6k on each such trader. % of traders who go live, then fail 2 times and go live again = 1%*10%*20% which is 2 in 10,000. Patak loses 4k on each such trader. % of traders who go live, then fail 1 time and go live again = 1%*10% which is 1 in 1000. Patak loses 2k on each such trader. Its clear that Patak just loses incredibly small amount of money by making this criteria in trader's favor, simply because number of such traders is so low! However they get incredible marketing that they are not asking a trader to make back his losses. You know what - You said if you were running your own such firm, you will always require a trader to make back the amount he lost. However, if I was running a Patak clone, say "GMST Combines" LOL, I would advertise that I will let a trader fail 100 times in live trading and NEVER ask him to make the lost money back. Because "GMST Trading Partners" truly believe in staying with traders through thick and thin." That will sound way more attractive than Patak, no?!. LOL.
Why focus on Patak? Why not come down on the whole industry? Do you think any other firm is going to publish their numbers? This request is foolish and unreasonable. A prop firm who chooses to back or not to back a trader also has the choice to publish or not to publish their trader's success rates. You keep making reference to the fact that you are a "professional trader". Why don't you go ask all of your buddies what their risk parameters are and post that up. Anyone clearing 7-figures has essentially self-imposed risk parameters and most probably has a history and relationship with the firm. Such that they will have covered losses in the past just as they may request an abnormally large check today. I watched a guy call his wife in tears and have her wire over $300k to cover losses on the day of the flash crash. At the same time some guys were requesting 6-figure withdrawal checks. Have you ever experienced anything like that? If you have why don't you post up those details. Again, if you are the "professional trader" that you say you are, why don't you post up all the numbers you and your buddies have in risk parameters? How much capital are you trading? What is it leveraged? How much is your daily loss limit? That would be a much more "normal" situation vs. comparing a complete new trader to a veteran clearing 6-figures.