I've made the "scaling up" argument to myself numerous times to justify taking a crack at the combine, and yes in many ways mathematically it would be better to just trade one's own account if one did in fact have a net positive strategy and the necessary capital. I think there are 2 issues - one is money, the other psychological. The money issue is that while it may be easy to get futures leverage, having the capital to weather the bigger swings might not always be there, even for decent traders. But the other issue, and the bigger one imho, is the whole psychological aspect. Why do people pay for ongoing gym memberships and pay personal trainers when they could have an entire gym in their basement for a tiny fraction of the cost. Why do people pay thousands of dollars for tutors or coaching when they could just read the books and apply the lessons themselves? There examples are infinite, but the fact remains that people want (and more importantly NEED) the discipline imposed by a TST system (no big drawdowns or back to combine, etc, etc) because they can't go it alone. We could argue whether that is a fatal flaw, perhaps it is, but accountability goes a long way and the cost of the TST Put, if you could call it that, is never too high if it can turn a marginal/losing trader into a net profitable one (by enforcing good habits). More anecdotal, while I always kept/keep up capital to ensure 100%/95% payouts, I knew guys that had no-cap-deals where they would get millions in bp but only keep 60% of the profits (trading equities). I do not know whether they just didnt have the capital themselves or whether they were just comfortable with the arrangement, but I guarantee there was something there (or not there!) psychologically that limited them from putting up the necessary amount to get 100% payout. (Or perhaps they were on a draw, not entirely sure) But in any case they were making good money, so I don't think you could say it wasnt working. While it is probably never mathematically optimal, it is undeniably better to accept one's limitations and put in procedures to accommodate them rather than pretend they don't exist.
My Bad, I must have misunderstood earlier, or maybe they change rules. Could you maybe please ask MP to clear the air on commissions too. +1 Very nicely put
Can you get him to clarify about the non compete entitling tst to the same % payout when trading your own money or can we assume the person that posted that was full of $hit ?
Here is the transcript of my orientation with TST. [8:40:39 PM] me: how much does one have to make in order to build a cushion and have your stop loss increased as senior trader [8:40:55 PM] Conor TopstepTrader: $15k in profits [8:41:12 PM] me: oh so before 15000 USD for a 50k usd combine [8:41:19 PM] me: i have to trade with a 1k usd stop loss? [8:41:48 PM] Conor TopstepTrader: Yes [8:42:00 PM] me: what will my stop loss be increased to once i make 15k in profits [8:42:12 PM] Conor TopstepTrader: Once you make $15k you can negotiate your max position size, loss limit, drawdown, etc. [8:42:18 PM] me: ok [8:42:39 PM] Conor TopstepTrader: That depends on how you've been trading and what you would like it to be, you will discuss that with your Scout who is more or less your mentor assigned to your account I was not saying numbers out of the blue. Did you ask MP, if what he said was specific to the 30k combine. Either way hes quite helpful, he will reply on the BMT thread if you ask him any question. This was on Jan-Feb 2014 though, not sure if they changed their rules now. Anyways it is quite fair,since you should have at least 10-15 times your daily stop as a cushion in your account. no point negotiating for a higher stop, before you build that cushion
he said the information they have on the website is correct and regarding volume,it can be negotiated for senior traders who have "high volume"
1) If you double the value of your own personal account, GREAT! Good for you! But that's the end of it. The only additional buying power comes from yourself by adding more of your own money to your account. You do get all, 100%, of your profit for yourself though. 2) If you double your account at TST, you put yourself in a great position to ask for more buying power. It could conceivably be 2-times more, 5-times more, even 10-times more! If you then double that, you're making proportionately more money, even with a probable 80% payout. Then you can keep asking for more buying power until you exhaust the equity partner. This assumes one is not "getting bent out of shape" over the equity partner making some money out of the whole affair. I hope that's what you were originally asking.
Yes, presumably the backer(s) have deep pockets and scaling up has much greater potential in the same block of time as an individual trying to pyramid their own modest account. That, in today's ultra-low volatility environment, to boot. In my own case I was (may be again someday) interested in the potential of trading whatever size actual dollars account (who really cares?) with leverage for 10 - 15 contracts above and beyond what I already can. And most importantly, potential for more than that over time. It's the same equation as any equity trader working for themselves versus working prop. An individual trader has every dime possible at their disposal in their own personal futures account. There is no possible way to add one more dime from inside their curtilage. Then TST comes along and offers potential for more on top of that. How is that concept so hard to grasp? All that's left from there is debate over the details and feasibility of such "potential"
Actually, the backer needs a relative small amount of money to back ALL funded traders. Once I calculated that 1.5 million would be enough to back all 50 or so LIVE traders, and that isn't really much, probably MP has himself that much. Several of the posters here could cough up that. Remember real account value is MUCH less than stated account value. By the way there is really no point in talking about account values or buying power. We should just say, max. number of permitted contracts. Because that is the relevant number, not the account's value. The account could be huge, if your permitted max. number of contracts is only 3, it is irrelevant how big % of the account you are NOT using. So when they say, in your 30K account trading the ES we increased the buying power by 10K, they really mean is: now you can trade 5 cars instead of 3. But the account's value didn't really change because you can easily trade 10 or more ES cars with a 30K account. Bottomline: Forget about account value and concentrate on max. usable cars....
A very entertaining thread, containing some interesting relevant info: https://www.bigmiketrading.com/trading-journals/31910-martha-chiriboga-s-trading-journal.html Apparently, you can trade 30 cars in the Combine if you are deluded and like to pay double the normal fee....