OK guys, I watch this forum and have recently been reading on the Patak threads. I would love to find a genuine opportunity such as this. What I am seeing in many of the threads is arguments that TST is a scam based on opinions and assumptions. I am a skeptic myself...of everything, lol. I shot Hoag a PM with a brief inquiry and a phone # and he called me the next day. I came away with the impression of honest answers for my jumbled questions. I trade equities, not futures, so there are many basic things I am looking into and may not refer to or understand properly, yet.
Many of the concerns I have seen in the threads are issues that I do not see as valid at this stage. The main points I am looking at are these:
1) What is my personal liability and monetary exposure in the event of a large loss due to unseen/un-controlable events.
2) How am I paid for my work?
3) Does the math work out to a sum that is worth while to me.
Those 3 things are the first step, to me at least, for determining whether or not I want to attempt the combine. According to TST, the trader has no liabilities or monetary exposure. The combine fee is insignificant as it is a cost for the opportunity, a one time charge and completely up to you whether or not it is spent well. When talking about the amounts involved when trading, $200 is cheap cost for the opportunity. If one is serious about trading this cost is relevant and understandable. The pay issue is fairly straightforward. You are paid a percentage (the split) of the NET profits you generate trading the capital they provide. Withdrawls can only be made after a cushion of profits is established in order to mitigate the risk. Understandable. Pay percentages are increased based on profit cushion levels. If you are a good trader, this works to your favor as it encourages you to increase your capital base which in turn increases your profit value based on percentages. Also, the scale tips largely in your favor the more profitable you are. This also makes sense as they are rewarding based on performance. Similar to working on commission. Providing they uphold their end of the bargain and facilitate the trading you provide, it seems to be pretty straightforward.
Lastly the math. I read where it was mentioned how someone who had traded for TST and felt scammed or slighted. My question here is were they really scammed or did they have unrealistic expectations. Were they as good of a trader as they thought they were or are they merely upset because their performance did not achieve the results they expected. If they were a good trader and the math is done properly, they should come out net positive. It just depends on how much "net positive profits" you need to live the life you deem acceptable. Can you realistically generate enough income to live off of after all costs and taxes are deducted.
TST does not appear to be charging anything other than the combine fee. Thats not a scam. They offer a product. You decide whether you want to participate or purchase that product the same way you do with any other purchase. Don't like, don't buy it. They may make money off of the transaction costs, but again that is a service they provide in order for you to benefit. They are a business, why shouldn't they profit as long as it is not excessive and detrimental to the trader. These transaction costs can also be controlled by the trader by managing his/her trades properly and preventing overtrading. They seem to offer several ancillery products (coaching, training, etc.), but again that is a product that you have a choice to purchase or not. You are not forced, at least not that I see, to spend or obligate any money to TST. They make money by facilitating your trades and providing the capital to people with ability, but no means. That's fair I think. I work, they fund. Simple, unless I am missing something.
I built a spreadsheet to run the numbers and see how they came out in order to have a valid perspective rather than just an assumption or unfounded skeptisism. I based the numbers of off the funding amounts TST provides, risk/reward, splits and a 60/40 win to loss ratio. The trade amount is based on one trade per day (52 weeks x's 5 days per week = 260 trading days or merely 260 trades annual). I can change any of these metrics to adjust and see different outcomes. What I am finding is that while a living can be made, it again goes back to ones performance and how much they require or expect. The lower funding amounts will produce a lower level than most deem worthwile for income unless stellar results are achieved or one trades with a higher risk tolerance than generally acceptable for success. They have to swing harder to get the most out of each trade. The larger funding amounts allow the trader to reap worthwhile gains by taking smaller, safer swings. By being able to operate in this manner the capital is more protected and the profits more consistent. Therefore more income as you progress and the profit adds up. Win/Win!
It seems worthwhile to me depending on what you are trying to achieve (supplemental income or main income). I personally like the idea and will most likely give it a try if I can get a firm grasp on the T4 platform (completely different order entry process). I would like to add this to my trading as supplemental at first and just see where it goes.
No need to flame me. I posted this more for my decision making process than for anything else. I figured I would share what I have determined so far and see what you guys had to add. I personally think this is a decent deal with benefits for both parties. I would love to trade my own $100K+, but I do not have the means, yet. However, a year trading the $150K account with TST and there is a possibility I could earn enough to do so. Trade my contract time (1yr), save/compound my earnings and then go trade my own account if it is a better opportunity. Although, I'm not sure that would be a better opportunity if you are skilled enough to achieve their 80/20 split and trade without risking any of your own cash. I could "work" their cash and spend mine, lol.
Just my two cents on it. Still thinking it all out. Now that I have the $ math down, I think I'll start working on a calculator to construct position sizes by contracts (foreign to me at this point) and determine stop values based on percentages. If I come up with a plan I am comfortable with I will probably try this out. Will be a new experience anyways....
Thanks,
J.
Many of the concerns I have seen in the threads are issues that I do not see as valid at this stage. The main points I am looking at are these:
1) What is my personal liability and monetary exposure in the event of a large loss due to unseen/un-controlable events.
2) How am I paid for my work?
3) Does the math work out to a sum that is worth while to me.
Those 3 things are the first step, to me at least, for determining whether or not I want to attempt the combine. According to TST, the trader has no liabilities or monetary exposure. The combine fee is insignificant as it is a cost for the opportunity, a one time charge and completely up to you whether or not it is spent well. When talking about the amounts involved when trading, $200 is cheap cost for the opportunity. If one is serious about trading this cost is relevant and understandable. The pay issue is fairly straightforward. You are paid a percentage (the split) of the NET profits you generate trading the capital they provide. Withdrawls can only be made after a cushion of profits is established in order to mitigate the risk. Understandable. Pay percentages are increased based on profit cushion levels. If you are a good trader, this works to your favor as it encourages you to increase your capital base which in turn increases your profit value based on percentages. Also, the scale tips largely in your favor the more profitable you are. This also makes sense as they are rewarding based on performance. Similar to working on commission. Providing they uphold their end of the bargain and facilitate the trading you provide, it seems to be pretty straightforward.
Lastly the math. I read where it was mentioned how someone who had traded for TST and felt scammed or slighted. My question here is were they really scammed or did they have unrealistic expectations. Were they as good of a trader as they thought they were or are they merely upset because their performance did not achieve the results they expected. If they were a good trader and the math is done properly, they should come out net positive. It just depends on how much "net positive profits" you need to live the life you deem acceptable. Can you realistically generate enough income to live off of after all costs and taxes are deducted.
TST does not appear to be charging anything other than the combine fee. Thats not a scam. They offer a product. You decide whether you want to participate or purchase that product the same way you do with any other purchase. Don't like, don't buy it. They may make money off of the transaction costs, but again that is a service they provide in order for you to benefit. They are a business, why shouldn't they profit as long as it is not excessive and detrimental to the trader. These transaction costs can also be controlled by the trader by managing his/her trades properly and preventing overtrading. They seem to offer several ancillery products (coaching, training, etc.), but again that is a product that you have a choice to purchase or not. You are not forced, at least not that I see, to spend or obligate any money to TST. They make money by facilitating your trades and providing the capital to people with ability, but no means. That's fair I think. I work, they fund. Simple, unless I am missing something.
I built a spreadsheet to run the numbers and see how they came out in order to have a valid perspective rather than just an assumption or unfounded skeptisism. I based the numbers of off the funding amounts TST provides, risk/reward, splits and a 60/40 win to loss ratio. The trade amount is based on one trade per day (52 weeks x's 5 days per week = 260 trading days or merely 260 trades annual). I can change any of these metrics to adjust and see different outcomes. What I am finding is that while a living can be made, it again goes back to ones performance and how much they require or expect. The lower funding amounts will produce a lower level than most deem worthwile for income unless stellar results are achieved or one trades with a higher risk tolerance than generally acceptable for success. They have to swing harder to get the most out of each trade. The larger funding amounts allow the trader to reap worthwhile gains by taking smaller, safer swings. By being able to operate in this manner the capital is more protected and the profits more consistent. Therefore more income as you progress and the profit adds up. Win/Win!
It seems worthwhile to me depending on what you are trying to achieve (supplemental income or main income). I personally like the idea and will most likely give it a try if I can get a firm grasp on the T4 platform (completely different order entry process). I would like to add this to my trading as supplemental at first and just see where it goes.
No need to flame me. I posted this more for my decision making process than for anything else. I figured I would share what I have determined so far and see what you guys had to add. I personally think this is a decent deal with benefits for both parties. I would love to trade my own $100K+, but I do not have the means, yet. However, a year trading the $150K account with TST and there is a possibility I could earn enough to do so. Trade my contract time (1yr), save/compound my earnings and then go trade my own account if it is a better opportunity. Although, I'm not sure that would be a better opportunity if you are skilled enough to achieve their 80/20 split and trade without risking any of your own cash. I could "work" their cash and spend mine, lol.
Just my two cents on it. Still thinking it all out. Now that I have the $ math down, I think I'll start working on a calculator to construct position sizes by contracts (foreign to me at this point) and determine stop values based on percentages. If I come up with a plan I am comfortable with I will probably try this out. Will be a new experience anyways....
Thanks,
J.
