Is Topstep Trader legit or a scam?

[trade2020]

True but (to the best of my knowledge) you can’t hold overnight or session into another session in Topstep’s normal emini non micro accounts so most firms such as Tradovate you only have to put up $500 to $1000 per emini for intra-session day trading if you are closing out before end of session and since with Topstep you can’t hold regular emini’s overnight or session to session then that is the true comparison in my opinion

also there are other firms that offer fixed max drawdown which is comparable to having your own account as the fixed drawdown is always the drawdown below zero line whereas trailing max drawdown is from high watermark (whether it is unrealized high watermark or realized high watermark).
It would be one thing if the funding was revolving and continuous despite the trailing max drawdown. But combine trailing max drawdown with the “penalty” of removal of funding and acct closure should you want to withdraw all your profits and it’s not good for the trader at all in my opinion

I agree with what you have written, but my thought on it was freeing up the money I have in my futures account to put into the equity markets. Currently I keep between $80,000, and $125,000 to cover margin for multiple contract trades. With one of these operations I can leave very little in and they cover the margins on up to 10 ES, NQ etc.. At the same time giving up 20% isn't that appealing as well as for Topstep it seems they issue a 1099 for taxes so I would lose the benefit of futures tax treatment of 60/40. I also wonder if after you demonstrate you can trade whether they are open to widening the trailing loss. As I go up contracts I have had days I would have been shut down by their rules for trailing stop, yet for me it was within the limits of my stop I just had more contracts on so it was part of the trade. It has been especially true with the volatility for awhile now. I have wider stops, but they are defined by my plans for each trade. I also don't like the idea of potentially losing 3 weeks of income while doing the trial.

I agree with what you have written, but my thought on it was freeing up the money I have in my futures account to put into the equity markets. Currently I keep between $80,000, and $125,000 to cover margin for multiple contract trades. With one of these operations I can leave very little in and they cover the margins on up to 10 ES, NQ etc.. At the same time giving up 20% isn't that appealing as well as for Topstep it seems they issue a 1099 for taxes so I would lose the benefit of futures tax treatment of 60/40. I also wonder if after you demonstrate you can trade whether they are open to widening the trailing loss. As I go up contracts I have had days I would have been shut down by their rules for trailing stop, yet for me it was within the limits of my stop I just had more contracts on so it was part of the trade. It has been especially true with the volatility for awhile now. I have wider stops, but they are defined by my plans for each trade. I also don't like the idea of potentially losing 3 weeks of income while doing the trial.

 

[clockwork71]

Or, to rephrase the original question: "Is Top Step a legit scam?"

 

[futuristictrader3467]

TopStep's evaluation phase is literally twice as difficult as their competitors. (In terms of two step evaluation vs 1). I know of several people who got funded through OneUp and had a good experience relatively speaking. Their main complaint was in regards to how OneUp is not open and upfront about the evaluation rules. Which I believe is unfair but at least they pay out

 

[LCK2000]

TopStep's evaluation phase is literally twice as difficult as their competitors. (In terms of two step evaluation vs 1). I know of several people who got funded through OneUp and had a good experience relatively speaking. Their main complaint was in regards to how OneUp is not open and upfront about the evaluation rules. Which I believe is unfair but at least they pay out

Agreed, I'm also funded with OneUp and all has been good. Both the OneUp phase and the MES Capital (funded) phase. Not sure which evaluation rules OneUp isn't up front about, I'd say there was a few funded rules that were a bit more not up front in the eval phase, but nothing that was a deal breaker at all. Namely the first 3 months of funded you have to be profitable every 15 days.

Agreed TopStep is a tough one, the 2 phase thing. As well if you hit your daily loss limit you are busted, any other firm it just stops you out for the day but you can continue the next day. Much more reflective of a funded and/or if you had your own personal account.

I think people call all the evaluations scams as an easy way to place the blame. They are very difficult, and it can feel like you are just stuck giving them money and failing. Scam implies they take your money and you have zero chance of getting what you paid for. I do think they are far more difficult than they make it seem in the marketing. I'd be curious what the pass rate is, I'm guessing under 10% possibly under 5%.

 

[traderjo]

Agreed, I'm also funded with OneUp and all has been good. Both the OneUp phase and the MES Capital (funded) phase. Not sure which evaluation rules OneUp isn't up front about, I'd say there was a few funded rules that were a bit more not up front in the eval phase, but nothing that was a deal breaker at all. Namely the first 3 months of funded you have to be profitable every 15 days.

Agreed TopStep is a tough one, the 2 phase thing. As well if you hit your daily loss limit you are busted, any other firm it just stops you out for the day but you can continue the next day. Much more reflective of a funded and/or if you had your own personal account.

I think people call all the evaluations scams as an easy way to place the blame.

Hi ,
Sure nobody is going to fund anybody without the trader proving the skills first.
If you go through some of the negative posts about these "firms" you will see not everyobody is calling them scams...or illegal what people are questioning is
- True motive? is it true talent hunt or Grab test fess and fund very few
- Questionable marketing about "true account size" when funded , is 25 K account a true 25K in account or notional buying power? which means with Futures internal leverage they are not putting up 25K on the table really! so why call it 25K
- Test fee grabing firms masquerading as prop! just think why true prop firms like Tibra etc don;t sell Tests! they test you at their own expenses.
- The issue of definition of drawdown..true amount of funds that the firm risks ( various people have pointed out that some of the drawdown rule with some firms means the firm is not rally risking anything form their pocket after a while
- It is easy to dismiss any criticism of these firms as "sour looser" please look at the questions raised on it's merit)


They are very difficult, and it can feel like you are just stuck giving them money and failing. Scam implies they take your money and you have zero chance of getting what you paid for. I do think they are far more difficult than they make it seem in the marketing. I'd be curious what the pass rate is, I'm guessing under 10% possibly under 5%.

 

[tango29]

These firms are not actual prop firms so I think you need to stop making the comparison. An actual prop firm isn't going to give 99% of the people that try these tests a second thought of employment. They are hiring proven traders. I don't necessarily agree with these firm's as I think too many people waste an awful amount of money thinking they will get rich. My guess that in current markets there are people passing that then flame out after they get funded. Another revenue source is these people who figure they did it once they can pay and do it again, but end up handing over more in fees. They keep churning a lot of the same people over and maybe have a few that can hack it for a longer term. Those people eventually figure out they can keep 100% and move onto their own trading, or possibly if they stick around for a year or two they have an actual track record to show a real prop firm.
At the same time why are they going to make easy rules and let everyone pass and go through the headache and cost of setting people up with their company, only to have them crash and burn immediately?

 

[traderjo]

These firms are not actual prop firms so I think you need to stop making the comparison.
I know that ...the issue is many of them portray as "Prop for masses.." and that coupled with questions about hamster wheel etc that part is why many question this model.. as straight forward as that .


An actual prop firm isn't going to give 99% of the people that try these tests a second thought of employment. They are hiring proven traders. I don't necessarily agree with these firm's as I think too many people waste an awful amount of money thinking they will get rich. My guess that in current markets there are people passing that then flame out after they get funded. Another revenue source is these people who figure they did it once they can pay and do it again, but end up handing over more in fees. They keep churning a lot of the same people over and maybe have a few that can hack it for a longer term. Those people eventually figure out they can keep 100% and move onto their own trading, or possibly if they stick around for a year or two they have an actual track record to show a real prop firm.
At the same time why are they going to make easy rules
Ofcourse no body would and I am not saying that they should .. again the question is about real motive transparency etc...
if the real motive is finding talent then in this age of technology sorting out performance shoudl not be a costly affair!
If the real motive is test fees generation then that is a diff story

and let everyone pass and go through the headache and cost of setting people up with their company, only to have them crash and burn immediately?

 

[boatprint]

If I sell you a $20 bill for $25, and I'm up front about that deal, it's legit, but it's still a ripoff.

Topstep's business model may be legit, but it's definitely a gigantic ripoff for the trader. Their business model isn't to profit off of profitable traders, it's to collect a bunch of fees from everyone who signs up. Majority of people sign up, pay their ripoff fees for a while, then fail, so TS never has to take any actual risk on them. They spend money on marketing to draw in people who think they can get rich quick trading (but in reality have zero ability to actually be successful), and get them to fork over subscription fees until they realize they can't cut it.

 

[traderjo]

If I sell you a $20 bill for $25, and I'm up front about that deal, it's legit, but it's still a ripoff.

Topstep's business model may be legit, but it's definitely a gigantic ripoff for the trader. Their business model isn't to profit off of profitable traders, it's to collect a bunch of fees from everyone who signs up. Majority of people sign up, pay their ripoff fees for a while, then fail, so TS never has to take any actual risk on them. They spend money on marketing to draw in people who think they can get rich quick trading (but in reality have zero ability to actually be successful), and get them to fork over subscription fees until they realize they can't cut it.

boatprint,,,Agree 100% and this applies to all the Pay for Test pretend Prop not just TST
Also what happens is those who take a the bet and fail just think about themselves and forgo the test fee as part of the experience.. it is sort of reverse of heard mentality...
But for these companies that is one more fish in the basket ...as a consumer/ society one day I hope enough people will think that is is not really a good ethical model..and hope the regulator's realize it that also.. until then the hamster wheel will keep turning ...
to make matter worst thee companies are deceptive in marketing also the so called 50,000 and 150,000 account DOES not mean that you get 50 or 150 K USD actual in trading account and then further leverage it.. if people can't even question such a simple fact then they deserve to be fleeced this way...

 

[boatprint]

boatprint,,,Agree 100% and this applies to all the Pay for Test pretend Prop not just TST
Also what happens is those who take a the bet and fail just think about themselves and forgo the test fee as part of the experience.. it is sort of reverse of heard mentality...
But for these companies that is one more fish in the basket ...as a consumer/ society one day I hope enough people will think that is is not really a good ethical model..and hope the regulator's realize it that also.. until then the hamster wheel will keep turning ...
to make matter worst thee companies are deceptive in marketing also the so called 50,000 and 150,000 account DOES not mean that you get 50 or 150 K USD actual in trading account and then further leverage it.. if people can't even question such a simple fact then they deserve to be fleeced this way...

Yeah there's a ton of these "subscription" prop firms.
Any firm that's actually trying to make money off trading activity doesn't charge monthly subscription fees before they even start trading. There companies are more like "pay us to tell you that you can't cut it as a trader, so don't bother blowing your money trying to trade (instead pay it to us!)."

I think one piece of regulation that's needed is these firms need to be forced to disclose what % of people who pay them any kind of fees actually turn a profit on their sign up page, since it's borderline false marketing right now, since they make it seem like anybody can sign up, learn, and make it, when in reality it's probably 1-2% of people, if that, make it. Ofc they'll still bait in tons of people who think they can be that 1%. Anyone who actually has the knowledge and experience to be a long term successful trader would look at one of these prop firm's offerings and immediately see what a ripoff it is, and stay away, their target audience isn't traders, it's people fresh out of college, someone unhappy with their job and looking for an easy way out, or the type of people who buy lottery stocks hoping to get rich quick.