I wasn't aware of any "secrecy" clause. If you want to trade elsewhere and reveal your stats privately to another firm, then I can't see how that wouldn't be allowed. Let's say you trade for a year and receive a 1099, that is YOUR private information, and not the property of the firm. I'm sure any contract attorney can squash any secrecy claim. I agree that one can use TST as a "springboard" to jumpstart a career, especially if one is to go into managed futures or trade on their own. Like we've discussed endlessly regarding TST, a person who want to trade with some fixed parameters and learn proper money management skills is better off going through a combine, and trading a funded account, vs. opening up a futures account and blowing it up in a month. TST provides the infrastructure, and traders can choose whether or not to participate.
Actually, you cannot lost that $10,000 AND an additional $2,000, since after the 10th trading day on a funded account, if you are positive, then the rules specify that the account cannot go back to a "$0 balance." In other words, you cannot go beyond what you have built up in the cushion. http://help.topsteptrader.com/knowledgebase/articles/451701-funded-trader-rules
Very valid points and good analysis. However, I don't think anyone should look at at "$50,000 account" as having $50k of equity, so you cannot really use the 1% to 2% example of risk per trade of equity, since that is not the real equity you are getting in the live account. The "equity" is the trailing max drawdowns which are as follows: 30k account, $1,500 50k account, $2,000 100k account, $3,000 150k account, $4,500 Once you build a profit cushion, then the "equity" becomes that cushion, since you cannot go below the starting balance, which is zero. When people join prop firms to trade stocks and get $200k or $500k of buying power, that also isn't "equity" since the money you put up may only be 10k or 20k, which is the actual equity. So here again, you can't measure your risk based on a percentage of buying power, but actually the amount of equity you have to lose. Since the live accounts have daily as well as weekly max loss limits (with the exception of the 30k, which does not have a weekly), your risk per trade is much higher as a percentage of actual 'equity' in the account. If you're going to risk $200 on a trade, with a 50k account, then you're risking 10% of the available equity ($200/$2,000 = 10%). Since futures are highly leveraged, even if you opened your own 2k or 3k futures retail account, and decided to trade 1 lot of crude, and risk $200 to $400 on a trade, then your true risk per equity is obviously a higher percentage, just as it is with the TST account. The difference between a live retail account vs. the TST account is nobody is looking at your stats in the retail account, and you'd have to add your own equity to trade bigger size, whereas in the TST account you don't have to put up any capital regardless of size. Also, the whole process of the TST model is to develop trading discipline to increase the chance of profitability in trading live. Most guys who throw in 2k in an AMP account are going to "blow up" regardless, so if you're comparing opportunity cost, then TST is providing the lower cost benefit opportunity, at least up front. Now, if they make you hold the cushion in the live account after reaching the profit parameters, then yes, it will become less attractive even if you scale up over time. And yes, at that point it would make sense to open your own account, and keep the 100%.
Without seeing the trades behind just a profit number, that isn't too much information. Let's say you made 30K. But on what account size? Obviously making 30K on a 30K account is a much bigger deal than on a 150K account. So just waving your 1099 alone doesn't automatically gets you hired...
Yes, of course that is correct. Perhaps I wasn't clear, I was referring to the 1099 as just an example of proof. Obviously you would require the actual spreadsheet of the trading P&L to back that up.
I don't follow the logic at all. That person doesn't understand money management. I do not find TST's terms very onerous. However, I don't understand why anyone would do the combine unless they have no money at all to fund a trading account. You can get really big leverage day trading at specific futures brokers. For example, I can trade a 10 lot in ES even if I had less than $10,000 in my account with my current broker and he is not taking 20% of my profits.
Are you saying that TST requires traders to execute a non-disclosure that does not allow them to disclose their historical performance to potential employers or investors?
Agree on the non-disclosure part but I am not an attorney. I agree with the learning part. If one becomes successful trader from learning during the combine, it looks like it is a relatively cheap education. But, as a mentioned in my previous post, if a trader is profitable and meets all of the combine criteria, why would anyone want to go live with them unless they have no money or can't borrow some money from somewhere? 20%+commissions is some expensive money when you can trade similar max position size with a much smaller account with another broker. For example, on the continuous combine, there is a max position size of 5 lot with a $50,000 starting balance. You can intraday trade a 5 lot with probably $5,000 in a futures account.
Yes, although I am not familiar with the contract, so we have to ask someone who was a Live trader...