So in reality a track record means nothing if you want to trade prop ?
The bitter truth about Patak Trading
- Thread starter gmst
- Start date
So in reality a track record means nothing if you want to trade prop ?
Gmst, you and Mav are clearly responsible for inducing Topstep to become a sponser. You should ask Baron for a commission. Send him your bank wire instructions and ask for 10%.
gmst- I will try to sum this up point by point.
1) TO answer this. If you trade 5 or all on on your first trade that is up to you, we are evaluating how you trade in the Combine. We are looking for traders that can manage their RISK. So in this case I would recommend sizing down. There is nothing wrong with trading 1 lots, (if your arguement is then trade your own personal account I would say then go ahead, again the failure rate is the same no matter what size position you have, we trying to avoid that by developing traders, dropping certain mindset, etc)
If you want to be a size trader that is great, but big traders started off as small traders (1 and 2 lot traders) becuase if you can't trade small you can't trade big. The max position of 5 in the Combine simply lets someone know that is the max if they so choose. Again we scout for trading talent and those who can play WITHIN the risk parameters allotted depending on the account they sign up to be evaluated under. Our popular account size is $50,000, 5 lot max buying power (again 5 max if you choose to max) and a $1,000 daily loss limit. A $1k loss limit in a day is 20 handles of heat with a one lot..(a handle equals 1 point) that is a lot and probably not a good entry on your trade. Trade management and risk management is the core of what we are scouting for.
2) Number 4 of the trading plan is SIMPLY a preserving capital chararctericts we want in a trader. If you are up $500 on the day we want you preserving capital and making sure you go home with money in your pocket. Therefore having a retracement off your high water mark, like 50% off realized P&L high water mark means if I had a realized high water mark P&L of $700 for today, I will then call it a day if I continue to trade (if I so choose) and my P&L drops to $350. We always want to be trading for tomorrow. Our funded traders know when to hold'em and know when to fold'em and this keeps them on track until they build up their account. Once they build up their account these RULES are off. They are proven with us as a profitable trader and we don't watch them as closely. Again it is a prove it business.
As for mentioning the 5 lot max again, I would again say why are you maxing your position at 5 this is not trading if every position you put on is at max, you would look more like a gambler to just about anyone evaluating you.
3) SAME AS ABOVE where I mentioned 5 lot and why are we maxing it.
4) To address your final point, a person is our program is not trading their money they are traidng someone elses. So if you trade another persons capital you give up doing it your way and begin to learn another persons/firms way. On a final note to this, if you get sent back you do NOT have to pay for your first Combine back and typically if you did not do well in your first Combine going back from trading live you are a sound trader so your second Combine you will most likely be meeting the deposit rollover requirements, thus not costing you. Those that have been sent back and earn the opportunity to go back live also do NOT have to make up the losses they had when they were live prior. They start with a clean slate.
Lastly you need to understand that this may not be a fit for everyone. we can't cater to everyone nor will we try. But if you are serious about trading and getting on a new track rather then the one that is not working for you we ecourage people to start working with us.
mp
Quote from gmst:
Agreed Combine and Live traders trade very very light. Still, if you pass on the lowest commissions (still charging full exchange fees) I calculated and showed in my post# 2 that every trader on average will benefit between 250 and 554.40 USD per month depending on 50k or 100k account. For a particular trader with 150k account, benefits from saved comms would be >750 USD per month. That calculation assumed very very light trading (precisely 2 round trips per day). For a trader who goes live and trades for 1 year a 150k account, the amount lost due to paying higher comm = 750*12 = 9000 USD. Obviously after 3-4 months of live trading, this trader will also increase size. This calculation doesn't take increasing size into account at all. This is serious cash for a trader to forego!
I am sorry but unless you decide to pass on the cheapest commissions possible to your traders, it is hard for anyone to seriously believe that your best interests are aligned with a trader's best interests.
My suggestion is to dramatically reduce your commissions, if you want to give a fairer deal to the trader. Cheers.
Yes, Combines are refundable. But, a very small fraction of people doing combines will get refunds - and you don't want to highlight that point. Not a good business practice if you just highlight what suits you and don't fairly present the other side of the information - especially in the world of internet, social media and open communication.
I requested you to offer some numbers. But you responded with your marketing pitch! Your marketing pitch is very good, I must admit.
I was hoping you would give me a serious response where you could have taken the points I made in my post#3 on this thread and refuted them point by point. But you have disappointed me. You know at Wharton - we have a saying. Your words don't count unless backed by numbers! And all over the world, there is a saying - Talk is cheap. So, please for God's sake, confront me on my numbers. You are the CEO, you should have access to all the numbers. Please show me where I am erring in my logic.
Btw, Congratulations on becoming an ET sponsor. This will give you a good platform to clearly put forward value proposition of your firm and silence your doubters (like me) by offering a point-by point response. Cheers.
gmst- To answer the first part about commissions. We are not a discounted brokerage house. We can not compete with those commissions. This is what Patak Trading Partner has worked out with our clearing. It is fair. If we have high volume traders(which we do not) then we can go back to the clearing firm and work something out as we will work to retain any talent that we find. That is not in the cards at this time. To add to this, there are no platform fees cost for squawk, or any other tools as a funded trader (excluding the advanced charting option that the platform provider debits the trading account of the funded trader if they request that they want it).
hopefully we can lay commissions to rest.
Now to the next part:
You mentioned: Yes, Combines are refundable. But, a very small fraction of people doing combines will get refunds.
We have a large amount each day become eligible for a refund, I am confused on your speculation by saying a small number do this? If it was something I said earlier please let me know.
Those that become eligible for a refund roll this over to start a new Combine after discussing what to work on with the scout who reviews them. We rarely get recruits asking for a refund, most rollover and continue to work on their trading.
On a final note: TopstepTrader, LLC. is an trader education and recruiting firm. The talent TST finds goes to PTP (and other interested parties). PTP is strictly proprietary trading firm. These are two separate entities with two different business models just an fyi.
mp
ps. the last part of you prior post I answered by quoting your #3 post and tried to go point by point.
For the most part, yup. I've been in Chicago for 9 years so I can only speak about how it works here, but like NY, it's really a "who you know"
kind of town. That's not to say if someone who obviously can't trade has a lot of friends at prop firms that someone will hire them. It simply means if 10 guys all have some kind of a track record, the guy who is connected the most from those 10 will get the job. I'm sorry but this is how the world works. Don't blame me, I didn't build this world.
And like Michael said, daytrading is a very different apple. If you come to me with sheets from 3 years ago it will say nothing about how you are able to handle "this" market. I'm happy if you made money in 2008 but a lot of guys that did can't string together two consecutive profitable trades in this tape. TST, like most firms want to back guys that can make money NOW in THIS tape. Not in the tape 3 years ago.
Just like in sports, The Bears have to win the Superbowl with the 2012 team, not the 1985 team.
Michael,
Thanks for giving a point by point response. The conversation on this thread has led to a much more detailed analysis of the program at Patak than available on the website. I have raised my reservations and you have put forward your points. I think its up to individual traders now to decide if they want to go ahead with Patak or not.
The main conclusions are:
1) You are not going to change your commission structure, even if its going to cost 9000 USD or more per year to a successful trader trading 150k account at Patak.
2) I still think Combine objectives are way too tough, especially because performance has to be met on every 10 day/20 day basis.
3) I still think on a 50k account asking a trader to put in a trailing stop after 500$ in profit is nonsensical. This limit should be increased to at least 1500$-2000$ for it to make sense. Remember, in trading we want winners to be 'generally' larger than losers. EDIT: Another way you can define the trailing limit is by defining it in number of points rather than dollars. So, for example ES: a trader must put in a trailing stop after trade is 8-10 points in his favor.
My final suggestion to you is that - once a trader goes live, make him adhere to performance objective over say every 50 or 100 trading days instead of every 10 or 20 trading days. This would increase the odds of retention of a trader in live trading by a HUGE margin and you might have a serious business of finding, funding and retaining good traders. 10 day/20 day is just a churning model. Simply because over time, vol changes, market character changes, there are good months, there are slow months. So, "LIVE" traders should be evaluated over a longer period rather than on a 10 day or a 20 day basis for the model to make sense.
Ultimately its your company, so you will take the final call. But I think if you make above changes, this program will start making a little bit of sense from traders point of view. Otherwise, it is an extremely lop-sided program as it currently exists.
Thanks for giving a point by point response. The conversation on this thread has led to a much more detailed analysis of the program at Patak than available on the website. I have raised my reservations and you have put forward your points. I think its up to individual traders now to decide if they want to go ahead with Patak or not.
The main conclusions are:
1) You are not going to change your commission structure, even if its going to cost 9000 USD or more per year to a successful trader trading 150k account at Patak.
2) I still think Combine objectives are way too tough, especially because performance has to be met on every 10 day/20 day basis.
3) I still think on a 50k account asking a trader to put in a trailing stop after 500$ in profit is nonsensical. This limit should be increased to at least 1500$-2000$ for it to make sense. Remember, in trading we want winners to be 'generally' larger than losers. EDIT: Another way you can define the trailing limit is by defining it in number of points rather than dollars. So, for example ES: a trader must put in a trailing stop after trade is 8-10 points in his favor.
My final suggestion to you is that - once a trader goes live, make him adhere to performance objective over say every 50 or 100 trading days instead of every 10 or 20 trading days. This would increase the odds of retention of a trader in live trading by a HUGE margin and you might have a serious business of finding, funding and retaining good traders. 10 day/20 day is just a churning model. Simply because over time, vol changes, market character changes, there are good months, there are slow months. So, "LIVE" traders should be evaluated over a longer period rather than on a 10 day or a 20 day basis for the model to make sense.
Ultimately its your company, so you will take the final call. But I think if you make above changes, this program will start making a little bit of sense from traders point of view. Otherwise, it is an extremely lop-sided program as it currently exists.
Michael, can you address this point. I kind of took the liberty earlier to say this is NOT the case. It's my understanding that once you go live, the only thing you have to adhere to is the max daily loss which still cuts you off if you hit it for the day. I could be wrong about this. So please clarify.
For example, say in the combine the trader chose, they had to make 10% over a 10 day period. And they did it and they went live. Do they have to make 10% every two weeks on a live account to stay live? It says clearly on your website there are NO profit objectives for live traders. Please clarify this. Thanks!
Patak,
How do you keep traders from taking their capital and making it on their own? What is the agreement? Is it a contract? If I had to sign a contract, I would never do TST. I can't find info on this on your website.
It sounds like if someone can meet the criteria on the website, that they can take their earned capital and become much richer than they would be working for a firm no one has heard of like yours. Besides, who wants to work for a futures prop firm for any length of time? I don't get it. I don't know who is successful as a futures trader and doesn't work for themself or for a big institution (like UBS or FNYS). I don't hear anyone walking down Michigan Ave saying "yeah, after that tough day at Patak we went over to Goosefoot in his new 458" ???
How do you keep traders from taking their capital and making it on their own? What is the agreement? Is it a contract? If I had to sign a contract, I would never do TST. I can't find info on this on your website.
It sounds like if someone can meet the criteria on the website, that they can take their earned capital and become much richer than they would be working for a firm no one has heard of like yours. Besides, who wants to work for a futures prop firm for any length of time? I don't get it. I don't know who is successful as a futures trader and doesn't work for themself or for a big institution (like UBS or FNYS). I don't hear anyone walking down Michigan Ave saying "yeah, after that tough day at Patak we went over to Goosefoot in his new 458" ???
Maverick good points as I was going to reply to the track record post as well.. We receive these and other prop firm owners I know receive these but all share the same thought that they really don't care to much about track records (or what you did in 2003, 08, or two months ago). Ya it means something but it doesn't mean you are profitable trading today and that is what counts.
What you are saying when you apply for a trader position with any firm is hire me because I can make money in today's market. Firms know this does not hold true more often then none and therefore many firms start traders on an under review type status (that is after you go through training or classes for 3-8 months) trading the absolute bare minimum before ever giving them more risk.
Maverick... it is the end of the week. You mentioned you are in Chicago?... for the beating you took and gmst's popular thread I do offer you both a drink at Ceres cafe sometime soon. I am betting we would all have a good time talking shop.
Take care everyone and have a great holiday weekend.
mp