Topsteptrader

trader99 · Jun 5, 2014

ScalperJoe said:
Yes, you got it. The value of the TST program in the front end is to build confidence and discipline in your trading plan, and the value of the back end is to trade size.

You can push "1 lots until you build up a cushion" in your own AMP account, you don't need to pay anyone 35% on your first 30k of profits and then 20% on every dime thereafter, AND pay more in commission/exchange fees, unless there is value in the back end, which is size.

If you can't eventually trade size, then you are better off trading on your own and keeping 100% of the profits, as long as you take the value of the program (confidence and discipline of trading in a structured environment) and incorporate it to your own retail account.
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You are right with your math. That's' why I'm not interested in the $30K account. I want the $150K acct where I can swing at 10-15 lots to start. But having read the requirements, it seems way way tighter than I had thought.

I don't need TST to push onesies and twosies, threesies,etc. and pay for the exchange fees and entry fees. I can do that on my own easily. I'm comfortable pushing 5+ lots in my acct and maybe up to 10 max. But I like the call option and risk transferred to a backer for more than 10 lots. Like 20-100 lots.

Maybe I trade some more and hopefully the right opportunity will come up to swing size.

There are still kinks I need to work out on my method. I'm happy where I am and look toward this as a long term career development.

As I've said before, I have a nice corporate job. This is something I'm doing on the side with OK results and constantly looking to improve..

Having said all that, with the $150K acct how easy it to scale BIG fast? Or does it start with 15 lots and end with 15 lots... Or everything is negotiable..

Ace_Rothstein · Jun 6, 2014

In regards to the concept that the 30k combine is the best due to the lack of weekly loss limit, one question - if there is no time limit to be a junior trader and hit the profit target to move up, why not just size down initially as a junior trader in one of the bigger combines to avoid hitting the limit? It would take a little longer but then once you get to be sr trader you would have the additional bp/contracts to size up as you profit.

shiko2000 · Jun 6, 2014

With consistent results trader can build account pretty quickly to swing thos esaid 20-40 contracts. 2-3 years with consistent results. For example. Considering my total Combines progression since December 2013 i would have been trading 2 contracts now and on my way to 3 contracts cushion.
I am pretty sure some guys with nice sized accounts would have been getting to those sizes on their own were they to spend more time improving their trading rather than discussing TST. May be people do not have patience anymore and want everything right away.
But we know guys built their accounts from practically nothing to very large sizes indeed. Again, those who can structure their trading within TST parameters can do it.

Pekelo · Jun 6, 2014

ScalperJoe said:
And I don't see any flaws with Pekelo's math skills, but to each his own.
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Is old Mav badmouthing me again? Oh I see, of course, he is just generally crying about me, because he doesn't dare to criticize my points, because they tend to be FACTUAL. Well, nowadays even the paid shills aren't what they used to be.... [shaking head]

Anyhow, since we are at math, let's throw in some numbers just to make Mav's head spin!

Here are 3 reasons why these firms overstating the funded account's value:

1. It just sounds better, and it pleases the trader's ego. No math yet, this is just psychology.

2. If the traders realized just how small amount really needed (to trade 1-3 cars intraday), they might fund their own account, instead of trying to get backed. 30K is usually too high for a newbie, but a 3-5K account is entirely doable.

3. The higher the account's value, the smaller the return % needed to pass the combine, thus it seems more achievable. Ready for the math? Here we go:

If it is TST's 30K 10 days combine with the 1.5K profit target, that is a 3K monthly return on the supposedly 30K account. Since I have my calculator handy, that is a 10% return per MONTH, which is entirely doable with a futures account.

But wait! The real account's size can be as low as 5K (depending on the traded product) thus the math changes a lot. Now you actually have to make 60% PER MONTH to pass the combine.

I will do the math for you guys, that is a 720% annual return rate. Now ask yourself, if a trader can make such a return, does he really need a backer??? Now to be fair (because I am a fair animal) the backed traders don't have to sustain the Combine's level of achievements all year long, but my point is still stands, if you take the real account size into account, the needed level to pass looks way more unrealistic. And if the trader doesn't keep a close to the Combine's level of profit making up, he might as well just drive a taxicab because he won't be making much....

Any constructive criticism to my math is welcomed, because I like to be correct...

---------------------------------

Slightly related, here is a thread from a newbie who is making 2K per week on a 2.5K account using options and asking us just how sustainable this level of profit making in the long run:

http://elitetrader.com/vb/showthread.php?t=284438

Well, he is either the second coming of Jes... I mean Livermore, or he just got a lucky streak....

Maverick74 · Jun 6, 2014

Oh boy, where do we start here. Pekelo's math is once again a train wreck. Let me address these one at a time.

Here are 3 reasons why these firms overstating the funded account's value:

1. It just sounds better, and it pleases the trader's ego. No math yet, this is just psychology.

This is just silly, so let's just ignore this for now.

2. If the traders realized just how small amount really needed (to trade 1-3 cars intraday), they might fund their own account, instead of trying to get backed. 30K is usually too high for a newbie, but a 3-5K account is entirely doable.

Since Pekelo does not trade for a living, and doubt he ever has, he sees the world of trading through minimum margin requirements instead of through the lens of capital commitment. Two VERY different concepts. Yes, you can fund an account for 3k to 5k, that has been stated on this thread 100 times. However, 3k to 5k is NOT, I repeat NOT, your capital commitment. That account might actually need 25k, 50k or even 100k to become profitable. How much you start with is useless. It's a business. And like all business, they need cash flow and capital to sustain themselves.

Think of it as starting a restaurant. One can actually start a restaurant with little to no money. Pekelo would come on here and brag about the "minimum requirement to open a restaurant is only 10k or 20k, the rest the bank will loan you (margin). Here's the problem and if Pekelo EVER ran a real business he would know this, while the bank will loan him money, this restaurant will need WAAAAAAY more then 10k or 20k to stay in business. Over two years it may cost him over 100k. Sure he can try to borrow more and more and more, but at some point his cash flows has to make the loan payments are the bank will call the loan in. But Pekelo will tell newbies all it takes is 20k, don't listen to that evil Mav who says you need 100k to 150k to run a restaurant.

It's the same with trading. Yes, you can "open" an account for next to nothing. Hell, why stop at 5k, you can open an Oanda FX account for $5. But I assure you, most FX traders are not losing $5, they will refund that account 100 times. Remember, ALL businesses need cash flow to sustain themselves, trading included. So while one can open an account for 5k, at the end of the day, after a year or two of attempting to trade, their "total account funding" might exceed 50k or even 100k. Think of it as the gambler who goes to Vegas who tells his wife he is only going to take $200 out of the ATM to play. Well, he does, except he never told her he was going to make 20 trips to the ATM.

As I've stated 100 times before on this thread, the real value of TST, and I believe the only value, is the amount of money they will save you vs refunding your own account 10 times. If a guy, or girl, can lose 1k to 2k in combine fees over the course of a year and realize they should do something else with their life, then TST is a Godsend. Because I will bet the moon they would have dropped more then that at AMP Futures over the course of a year trying to make it work.

3. The higher the account's value, the smaller the return % needed to pass the combine, thus it seems more achievable. Ready for the math? Here we go:

If it is TST's 30K 10 days combine with the 1.5K profit target, that is a 3K monthly return on the supposedly 30K account. Since I have my calculator handy, that is a 10% return per MONTH, which is entirely doable with a futures account.

Now this is just a product of lack of a good education. NOBODY and I mean NOBODY uses return on margin except some scrub bragging to his friends he made 100% on his trading account. The entire professional world uses return on notional. Why? Because it's standardized!!!! In business, you have to standardize data or you can't compare numbers. That's why in accounting they have this thing called GAAP (generally accepted accounting principles). It's so when companies put out their annual statements you don't have to decipher what metrics they are using.

In the trading world we use notional. This will normalize my data so that if my broker happens to give me better margin then Pekelo's broker or maybe I decide I'm going to trade nat gas in a 2k account and Pekelo uses 25k to trade nat gas, we have to normalize this data somehow to make it compatible. So we use notional value. Notional value does not mean that is the actual equity in the account, it simply means that we are generating a return off a notional amount that is standard.

So if Pekelo trades one crude oil contract and I trade one crude oil contract, we are both trading about 102k worth of oil. Maybe he think he only needs 1k to do this. I say 20k. If we both made 1k in a month trading oil, he would claim to be the better trader because he made 100% return. I only made a 5% return. Nobody would realize we actually had the SAME performance. So we "standardize" it, so that our return on notional is exactly the same.

But wait! The real account's size can be as low as 5K (depending on the traded product) thus the math changes a lot. Now you actually have to make 60% PER MONTH to pass the combine.

Again, see above, there is no real account size, there is only notional exposure. Nobody has to make 60% per month. It's absolutely shocking to me that he doesn't understand some basic finance 101.

I will do the math for you guys, that is a 720% annual return rate. Now ask yourself, if a trader can make such a return, does he really need a backer??? Now to be fair (because I am a fair animal) the backed traders don't have to sustain the Combine's level of achievements all year long, but my point is still stands, if you take the real account size into account, the needed level to pass looks way more unrealistic. And if the trader doesn't keep a close to the Combine's level of profit making up, he might as well just drive a taxicab because he won't be making much....

No, let's do some "adult math" here. Let's say a trader has to make 1500 a month. That's the so called 30k combine. Let's say he trades crude oil and let's round it down to 100k on the notional. That comes out to 18k a year on 100k notional or an 18% return. Not 720%. LOL. Now to be fair, I actually think making 18% a year for most guys IS really hard. I mean if you could do that year in and year out you could raise a billion dollars to start a hedge fund. So let me be clear here, I do NOT think the combine is easy. I do NOT think trading futures intra-day is easy. And I do NOT think trading in general is easy. So please don't mistake my position for, this is so easy even a caveman can do it. I'm simply showing the "real"math here. Not the silly Pekelo math that NOBODY in the real world uses.

Let's think of it this way. If you had to walk into a bank today, with your best suit on, nice clean shave, and you sat down with the President of the bank to get a business loan to execute a trading business. Whose math would you show to the Bank President? Pekelo's or mine? That's what it comes down to. You guys need to start thinking about this like a business and use "real" math and use "real" accounting standards. Enough of this making 1% a day and 500% a year and trading is so easy I just draw trend lines crap. Let's try to stay in the real world here. Not ET fantasy land.

Any constructive criticism to my math is welcomed, because I like to be correct...

I rest my case.

shiko2000 · Jun 6, 2014

Maverick74, in short, Pekelo statement regarding how it is so easy to fund and trade $5000 account of course is wrong. I myself would lose some $20K over the year I was taking first 8 Combines. 95% if no more would lose those $5-10K. and not once. In short to be able to trade $5000-10 000 with $3000 maintenance margin trader must have some skills and discipline which he can either learn by losing money many times or via going TST route. I have spent some $1800 on Combines and been mostly on rollovers through this year but once so it is much cheaper way to learn.

I disagree with you regarding time required to make it. It takes more than one year. Considerably more for vast majority. It requires not only plan but total change of psychological make up. to make it. Doctors and engineers study for some 6-10 years. Why is that trading different?

Maverick74 said:
Oh boy, where do we start here. Pekelo's math is once again a train wreck. Let me address these one at a time.

Here are 3 reasons why these firms overstating the funded account's value:

1. It just sounds better, and it pleases the trader's ego. No math yet, this is just psychology.

This is just silly, so let's just ignore this for now.

2. If the traders realized just how small amount really needed (to trade 1-3 cars intraday), they might fund their own account, instead of trying to get backed. 30K is usually too high for a newbie, but a 3-5K account is entirely doable.

Since Pekelo does not trade for a living, and doubt he ever has, he sees the world of trading through minimum margin requirements instead of through the lens of capital commitment. Two VERY different concepts. Yes, you can fund an account for 3k to 5k, that has been stated on this thread 100 times. However, 3k to 5k is NOT, I repeat NOT, your capital commitment. That account might actually need 25k, 50k or even 100k to become profitable. How much you start with is useless. It's a business. And like all business, they need cash flow and capital to sustain themselves.

Think of it as starting a restaurant. One can actually start a restaurant with little to no money. Pekelo would come on here and brag about the "minimum requirement to open a restaurant is only 10k or 20k, the rest the bank will loan you (margin). Here's the problem and if Pekelo EVER ran a real business he would know this, while the bank will loan him money, this restaurant will need WAAAAAAY more then 10k or 20k to stay in business. Over two years it may cost him over 100k. Sure he can try to borrow more and more and more, but at some point his cash flows has to make the loan payments are the bank will call the loan in. But Pekelo will tell newbies all it takes is 20k, don't listen to that evil Mav who says you need 100k to 150k to run a restaurant.

It's the same with trading. Yes, you can "open" an account for next to nothing. Hell, why stop at 5k, you can open an Oanda FX account for $5. But I assure you, most FX traders are not losing $5, they will refund that account 100 times. Remember, ALL businesses need cash flow to sustain themselves, trading included. So while one can open an account for 5k, at the end of the day, after a year or two of attempting to trade, their "total account funding" might exceed 50k or even 100k. Think of it as the gambler who goes to Vegas who tells his wife he is only going to take $200 out of the ATM to play. Well, he does, except he never told her he was going to make 20 trips to the ATM.

As I've stated 100 times before on this thread, the real value of TST, and I believe the only value, is the amount of money they will save you vs refunding your own account 10 times. If a guy, or girl, can lose 1k to 2k in combine fees over the course of a year and realize they should do something else with their life, then TST is a Godsend. Because I will bet the moon they would have dropped more then that at AMP Futures over the course of a year trying to make it work.

3. The higher the account's value, the smaller the return % needed to pass the combine, thus it seems more achievable. Ready for the math? Here we go:

If it is TST's 30K 10 days combine with the 1.5K profit target, that is a 3K monthly return on the supposedly 30K account. Since I have my calculator handy, that is a 10% return per MONTH, which is entirely doable with a futures account.

Now this is just a product of lack of a good education. NOBODY and I mean NOBODY uses return on margin except some scrub bragging to his friends he made 100% on his trading account. The entire professional world uses return on notional. Why? Because it's standardized!!!! In business, you have to standardize data or you can't compare numbers. That's why in accounting they have this thing called GAAP (generally accepted accounting principles). It's so when companies put out their annual statements you don't have to decipher what metrics they are using.

In the trading world we use notional. This will normalize my data so that if my broker happens to give me better margin then Pekelo's broker or maybe I decide I'm going to trade nat gas in a 2k account and Pekelo uses 25k to trade nat gas, we have to normalize this data somehow to make it compatible. So we use notional value. Notional value does not mean that is the actual equity in the account, it simply means that we are generating a return off a notional amount that is standard.

So if Pekelo trades one crude oil contract and I trade one crude oil contract, we are both trading about 102k worth of oil. Maybe he think he only needs 1k to do this. I say 20k. If we both made 1k in a month trading oil, he would claim to be the better trader because he made 100% return. I only made a 5% return. Nobody would realize we actually had the SAME performance. So we "standardize" it, so that our return on notional is exactly the same.

But wait! The real account's size can be as low as 5K (depending on the traded product) thus the math changes a lot. Now you actually have to make 60% PER MONTH to pass the combine.

Again, see above, there is no real account size, there is only notional exposure. Nobody has to make 60% per month. It's absolutely shocking to me that he doesn't understand some basic finance 101.

I will do the math for you guys, that is a 720% annual return rate. Now ask yourself, if a trader can make such a return, does he really need a backer??? Now to be fair (because I am a fair animal) the backed traders don't have to sustain the Combine's level of achievements all year long, but my point is still stands, if you take the real account size into account, the needed level to pass looks way more unrealistic. And if the trader doesn't keep a close to the Combine's level of profit making up, he might as well just drive a taxicab because he won't be making much....

No, let's do some "adult math" here. Let's say a trader has to make 1500 a month. That's the so called 30k combine. Let's say he trades crude oil and let's round it down to 100k on the notional. That comes out to 18k a year on 100k notional or an 18% return. Not 720%. LOL. Now to be fair, I actually think making 18% a year for most guys IS really hard. I mean if you could do that year in and year out you could raise a billion dollars to start a hedge fund. So let me be clear here, I do NOT think the combine is easy. I do NOT think trading futures intra-day is easy. And I do NOT think trading in general is easy. So please don't mistake my position for, this is so easy even a caveman can do it. I'm simply showing the "real"math here. Not the silly Pekelo math that NOBODY in the real world uses.

Let's think of it this way. If you had to walk into a bank today, with your best suit on, nice clean shave, and you sat down with the President of the bank to get a business loan to execute a trading business. Whose math would you show to the Bank President? Pekelo's or mine? That's what it comes down to. You guys need to start thinking about this like a business and use "real" math and use "real" accounting standards. Enough of this making 1% a day and 500% a year and trading is so easy I just draw trend lines crap. Let's try to stay in the real world here. Not ET fantasy land.

Any constructive criticism to my math is welcomed, because I like to be correct...

I rest my case.
More...

Maverick74 · Jun 6, 2014

shiko2000 said:
Maverick74, in short, Pekelo statement regarding how it is so easy to fund and trade $5000 account of course is wrong. I myself would lose some $20K over the year I was taking first 8 Combines. 95% if no more would lose those $5-10K. and not once. In short to be able to trade $5000-10 000 with $3000 maintenance margin trader must have some skills and discipline which he can either learn by losing money many times or via going TST route. I have spent some $1800 on Combines and been mostly on rollovers through this year but once so it is much cheaper way to learn.

I disagree with you regarding time required to make it. It takes more than one year. Considerably more for vast majority. It requires not only plan but total change of psychological make up. to make it. Doctors and engineers study for some 6-10 years. Why is that trading different?
More...

OK, I'm sorry, let me clarify. I did not mean it only takes 6 months to a year to become profitable. Much longer. What I meant was, one should not spend more then 6 to 12 months on the combines. I think one should start by taking advantage of all the "free" sims out there to put together a strategy. This could honestly take years in itself. Then once you have something you really believe in and it's been thoroughly tested and researched, now you need to add some emotion to the game. I think TST provides that. However, I think if you make it to this level, and you had a strategy that was working perfectly on a sim and you spend a year on the combines and you still are struggling, then I think you need to adjust your tactics. Not necessarily give up trading, but do something different. Maybe try stocks, options, swing trading, or if you are intent on daytrading futures, go back to the drawing board and change your strategy so that emotionally you can execute it better under stress. I just don't think you should keep doing the "same" thing over and over again with the same results. You know, that whole definition of insanity thing. Sorry for the confusion.

trader99 · Jun 6, 2014

Ace_Rothstein said:
In regards to the concept that the 30k combine is the best due to the lack of weekly loss limit, one question - if there is no time limit to be a junior trader and hit the profit target to move up, why not just size down initially as a junior trader in one of the bigger combines to avoid hitting the limit? It would take a little longer but then once you get to be sr trader you would have the additional bp/contracts to size up as you profit.
More...

Ace - That would be my reasoning as well. One should aim for the $150K account assuming you can pass the combine. LOL. Then trade more conservatively at first until you build that cushion.

So though you might have access to 15 lots. Trade 5 lots to start. Once you build $4500. Then go for 10 - 15 lots. To get $4500 on 5 lot is not that hard...

shiko2000 · Jun 6, 2014

I got it now.
Well, I had no strategy when started trading with TST but gradually it all started coming together.
Actually, I believe going with TST was the best trading decision I made.
I am still trying to get funded but have got a plan B to open own account if I am not funded by Dec 1, 2014.
I want to be funded and reach Senior Trader level to see if there is real potential with staying with TST. By which I mean if they have some point after which my size increase doe snot depend upon cushion I build but on overall trading record by that time so that it is not purely my risk. Otherwise I would see split part that is not mine as a part of spread/ expense which I do not need.
I think I am ready to go live. so, let's see how thing will go.
Trading own account the only metrics I care about is risk control max daily loss limits and consistency of strategy execution. In this regard not meeting TST metrics in not critical areas like daily loss limit is not important to me. i am already thinking in terms of trading my own account. If I get funded it will be great. If no, I will move to plan B.
Btw, I remember at one thread you mentioned Velocity as a good broker for smaller accounts. Do you still think same of them?

Maverick74 said:
OK, I'm sorry, let me clarify. I did not mean it only takes 6 months to a year to become profitable. Much longer. What I meant was, one should not spend more then 6 to 12 months on the combines. I think one should start by taking advantage of all the "free" sims out there to put together a strategy. This could honestly take years in itself. Then once you have something you really believe in and it's been thoroughly tested and researched, now you need to add some emotion to the game. I think TST provides that. However, I think if you make it to this level, and you had a strategy that was working perfectly on a sim and you spend a year on the combines and you still are struggling, then I think you need to adjust your tactics. Not necessarily give up trading, but do something different. Maybe try stocks, options, swing trading, or if you are intent on daytrading futures, go back to the drawing board and change your strategy so that emotionally you can execute it better under stress. I just don't think you should keep doing the "same" thing over and over again with the same results. You know, that whole definition of insanity thing. Sorry for the confusion.
More...

trader99 · Jun 6, 2014

Maverick74 said:
OK, I'm sorry, let me clarify. I did not mean it only takes 6 months to a year to become profitable. Much longer. What I meant was, one should not spend more then 6 to 12 months on the combines. I think one should start by taking advantage of all the "free" sims out there to put together a strategy. This could honestly take years in itself. Then once you have something you really believe in and it's been thoroughly tested and researched, now you need to add some emotion to the game. I think TST provides that. However, I think if you make it to this level, and you had a strategy that was working perfectly on a sim and you spend a year on the combines and you still are struggling, then I think you need to adjust your tactics. Not necessarily give up trading, but do something different. Maybe try stocks, options, swing trading, or if you are intent on daytrading futures, go back to the drawing board and change your strategy so that emotionally you can execute it better under stress. I just don't think you should keep doing the "same" thing over and over again with the same results. You know, that whole definition of insanity thing. Sorry for the confusion.
More...

I think it takes SIGNIFICANTLY LONGER than 1 yr to be truly PROFITABLE and CONSISTENT. You gotta take the long view here.

I wished I had used sim trading more. Would have saved me a lot of money. hehe. Most traders, including myself, thought sim was useless. You can use sim to test a lot of chart patterns in real-time before trading on a real account. Or even have both accounts open at the same time. Sim and real. If you are not sure if you should enter try it on sim. If it works out then remember that pattern. If it doesn't then you have not lost a single penny.

With a sim account you don't need to pay TST for combines after combines. IB has free sims.