How profitable are the traders and coaches at tst ?
- Thread starter volente_00
- Start date
I agree, so as a preventive measure, I have put him on Ignore. I wish him good luck, but anybody who is making it to Live trading should realize that until you actually get a paycheck from TST, it is nothing but sim trading and practicing at best...
No, you only have to build the cushion once. Thanks to Wavefinder for posting it, I wasn't aware that they dropped the cushions....
Wow, Pekelo backed down. :eek:
Yes but does your draw come from that cushion or do you always have to leave that cushion account with tst and only draw additional profits over it ?
My impression is you have to leave that cushion with them as long as you trade. My reasoning is if you read the outline, it says if you account balance reverts back to 0 you will be sent back to the combine. So if you made $1500 under the new guidelines, how can you draw from that because it will put you back at 0 after tst takes their cut and pays the trader.
Perhaps Crispy or Ian can clarify on how this works
Volente,
I'm also funded with tst so I can answer your question. Once you hit the cushion you can take a check and don't need to maintain the $5k. Obviously it would be silly if your balance is $5k to take out $4k because then if your balance ends at 0 at the end of a day you're done. I think you'd be best to always leave a few grand in there while you build up the account a little bit.
I'm also funded with tst so I can answer your question. Once you hit the cushion you can take a check and don't need to maintain the $5k. Obviously it would be silly if your balance is $5k to take out $4k because then if your balance ends at 0 at the end of a day you're done. I think you'd be best to always leave a few grand in there while you build up the account a little bit.
Once you withdraw your cushion, they also withdraw their share of that profit, so they are already protected up to that amount, which was usually the max. allowed DD anyway, so from that point they couldn't lose more than the initial account. That's why building the cushion is important.
I haven't done the math with the new numbers, maybe it is possible to lose a little for them, but I don't think it is that much. If you read the rules it is probably there.
Direct quote:
"Once established, the account cushion does not have to be maintained and account withdrawals are made at the discretion of the trader."
This is the same as it was.
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I am going through the new rules and now you have to have 6 winning days (out of 10, or 11 out of 20) compared to the 5 (50%) before.
By the way Vol, I take your interest is purely academic, since you are not allowed to average down in Live trading.
But if you want to continue trading and not sent back to the combine then you have to maintain the cushion in case of a drawdown.
So why lower the account cushion from 5000 to 1500 on the lowest account ?
The other question I have is on the payout %.
In order to get 80% payout you have to always leave 30k cushion in there ?
Or just be up 30k or more for the account even if it has been withdrawn ?
I'm too much of an outlaw to follow someone else's rules
I was surprised they did that, because that rule actually made sense. I agree, somehow the math doesn't fit now, if I am getting it right, TST can actually lose even after the cushion is established. The old amount exactly equaled their share and protected them.
In order to get 80% payout you have to always leave 30k cushion in there ?
I don't know and probably nobody is getting the 80% payout anyway, or only 1-2 traders, so the question is most likely academic.
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I will copy here what I originally intended for Crispy (since I already wrote it) about pigg... I mean leveraging traders. It might also explain to Ian why leveraging traders is a huge edge for a company like them.:
Let's do the math. They have let's say 40 Live traders, and I would say half never makes it up to building the cushion, so they never get a paycheck before failing at Live trading. So they have about 20 somehow consistent moneymakers. The most popular Combine to be passed is the 50K, so I would say the average backed trader's account is somewhere let's say 70K (we are talking averages here)
Let's assume (and that is a big assumption) that these 20 traders each makes 100% annually and the profitshare is 30% for TST. Mind you the account size is overvalued, but that is a different issue. So TST makes by backing almost 2 dozen profitable traders: 70K x 20 x 0.3 = 420K
Do you think making less than half mill for a firm is a good amount, having 40 Live traders? I don't think so. So what I am trying to get? That they don't make much money by simply backing successful Combiners. So the real money has to be somewhere else, or otherwise it is not a good business.
(as a comparison, if they leverage PT7 with 10 more cars, they would be making an extra 250K annually >>>making a huge difference in their bottom line) Basicly just leveraging 1-2 traders can make as much profit for them as all Live traders altogether.
But of course this is all conjecturing on my side and trying to make business sense. Sure, the Combine fees also bring in a lot and there is the education part, but the bottomline is, the big money is not in simply backing so-so traders...
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About the legality of leveraging traders. All they have to do is to put a sentence in the contract like this: Trades and signals are the intellectual property of TST and can be used in any way the company wants to.
Trust me, I play a lawyer on the internet...
This comment is so beyond absurd. These are the comments people make who do NOT trade for a living. Talking about making 100% a year like they are cutting their lawn. Nobody is making 100% a year. This is typical ET talk. Look, if any of these guys "could" make 100% a year they would not be playing around with combines and they would REJECT the offer to go live and simply trade their own money or they would be working for a hedge fund fund or real prop firm.
I don't know how to break this to Pekelo, but most of the proprietary trading shops in Chicago have completely shut down. And it's not from all the guys making a 100% a year. If there was this huge supply of traders out there making 100% a year, the demand to back them would meet that supply. That is simple economics. Not that Pekelo understands that.
I actually ran our Chicago office for 6 years. And we had a lot of daytraders. And NONE of them made money over time. Sure, some got lucky and had a good day, a good week, some even had a few good months. But most left the firm with nothing. Forget about making 100%, the best guys were just marginally profitable.
If Pekelo actually did this for a living he would truly understand just how absurd his statement is. But since he lives in this ET fantasy land where guys are turning 5k accounts into millions using simply moving avg cross overs, he thinks his statements make complete sense.
Let me say this again, if anyone is actually sincerely interested in the math and the statistics behind actually backing traders, read Jack Schwager's book that I referenced earlier. It's an outstanding read and it's loadeed with real actual data, not hyperbole and assumptions. After reading that book, you will come to understand the mathematical challenges of backing traders.