"I always thought balance and drawdown limit resetted after each withdraw."
Yes that is what I thought as well--however that is not the case with TST or E2T
On TST or E2T (either one can post here and correct me if I am wrong) my understanding the way they currently handle funded trader accounts is as follows
To keep this simple we will use 1 example for both (keep in mind Topstep doesnt take a 20% cut on the 1st $5,000 and E2T does take 20% on any amount withdrawn and doesnt offer a 100% threshold for withdrawals like Topstep does with the initil $5,000 in withdrawals)
*****Also please keep in mind that Earn2Trade (E2T) uses funding partners such as Helios for the funded accounts so where it says E2T above as well as below in the examples it really could mean Helios (or whomever the funding partner is) and not E2T******
Say you took the $150K combine challenge and that has a $3,000 daily loss limit and a $4500 max trailing drawdown. You pass and you get your funded account offer and it has the same $3,000 daily loss limit and $4,500 max trailing drawdown. Now you have passed and are trading live in your funded account.
Week 1 of your live funded account you never violate the daily loss limit and you actually generate a net profit of $5,000 (after commissions) in your account for the week. You want to pay some bills so you put in a withdrawal request.
Let now review what happens next based on the amount of your withdrawal request:
Withdrawal option 1) Lets say you need to withdraw all $5,000 to pay your mortgage and some other stuff, you are thinking surely if I withdraw all $5,000 I will still have my daily loss limit and max trailing drawdown of $4,500 and if I withdraw all $5,000 it will be going back to just like it was day 1 of my funded account---and that is where you would be wrong. Since it is a "trailing" max drawdown it trails from the peak equity meaning once you pass $4,500 in profits generated the $4,500 trailing max drawdown goes away and now your challenge is to not let your account balance drop to zero whether it is through withdrawals of profits or from trading losses .
so the bottom line is that if you generated $5,000 in profits the 1st week and you sent a withdrawal request in to withdraw all $5,000 then your funded account with either company would be closed as you would have no more drawdown left
Withdrawal option 2) Lets say you only need to withdraw $1500 for the weekend to go out partying. You send in a withdraw request for $1,500. For the moment we will forget about the difference in how Topstep and E2T do their 20% cuts on withdrawals and to keep it simple we will say that in either case--the company takes its 20% cut out of $300 and sends you the difference of $1200 (minus any service fee for ACH or wire). You know have $3,500 left in your account. Now when you start week 2 of trading you still have your $3000 daily loss limit however you only have a $3,500 max drawdown and not $4,500 max drawdown like you did when you started week 1 because it is a trailing drawdown and not a fixed drawdown.
So essentially --after you have an equity peak in your acct of $4,500 or more you need to leave $4,500 of net profits in the account at all times (after their 20% cut is factored in) in order to continue to have a $4,500 max drawdown.
So as an example with Topstep Trader if you initially generated $5,000 in net profits in month 1 you can take out a withdrawal of $500 and leave all $4,500 in the account. They don't take any cut on the 1st $5,000 in profits you generate. Then lets say in month 2 you generate $5,000 in additional profits - now there is $9,500 in your account ($4500 from month 1 left over plus $5,000 in new addl profits). You withdraw $5,000 and they take their 20% cut and you get the remaining balance of $4,000 (minus any applicable ACH or wire fee). and you left $4,500 of your previous profits in the account so you could continue to have your original max trailing drawdown of $4,500 intact for trading in month 3
So as an example with E2T if you initially generated $5,000 in net profits in month 1 - E2T will take out their cut of the $5,000 whether you take a withdrawal or not. Let's assume you take no withdrawal - E2T takes 20% of $5,000 which is $1,000 and now your account balance drops from $5,000 to $4,000. You no longer have a $4,500 max trailing drawdown--all you have now is a $4,000 max trailing drawdown to trade from at this point as it is based now on the buffer you have in your account above $0 meaning you need to generate enough additional profits and not withdraw them that after E2T takes its 20% cut of the new profits that the amount left over is $4,500 or more and you leave that amount in the account to have your max drawdown back like you had at the start in wek 1 of the funded account
Hopefully at some point in the future TST and E2T will either make adjustments to these programs or come out with a revised program
My suggestion would be for the trader who passed the combine tryouts to be given a choice of funding such as:
Option A- our standard 80-20 deal with a trailing max drawdown that works like the above examples
Option B - instead of the funding partner taking a 20% cut and the trader getting 80% - under this new option the trade gets 70% and the funding partner gets 30% however 2 things are different
a) the drawdown is now a fixed drawdown and not a trailing drawdown so the trader can withdraw to zero as often as they like and still have the max drawdown to trade against just like day 1 (and for affording that privilege to the trader the investor now gets 30% instead of 20%)
and
b) the trader is given defined metrics to reach or surpass in order to get guaranteed increased funding (higher max fixed drawdown and higher daily loss limits) over time with proven results
Hey trade have you confirmed that with TST or e2t ? If thats the case that;d mean you need to pass the combine 4 times for TST and 3 times for e2t to even make a withdrawal.
reach profit target twice to pass the combine and then cover the drawdown amount, thats 3. And then make more on top of that to withdraw, thats 4.
I always thought balance and drawdown limit resetted after each withdraw. If not this is the biggest scam out there. They're not even risking any capital if you failed the combine a few months/trys and resetted your account etc. They already covered their one time risk with the fees they collected from you and now charging you 20% to trade your own money... ??
I am in shock if thats true.
