Too much volatility that probably causes issues with margin and big size. It's logical, not a world ending rule (IMO)
Top Step Trader Funded Account Journey
- Thread starter Secret Sauce
- Start date
Too much volatility that probably causes issues with margin and big size. It's logical, not a world ending rule (IMO)
Then they should not be over-levering on a 150K account. ONE CONTRACT is all that is needed to make boatloads of cash for both the firm and the trader on an account of that size.
MADDENING! Just maddening!
You are correct. With the $3K drawdown + 15 contracts account, it is almost impossible to lose money trading 10 MNQ for even the most half assed trader. 25 points per day works out to $500 and with volatility, you get 50-100 points again, for even the most half assed trader. You reach the $9K profit target in ~ 20 trading days and you have now developed a second income stream worth ~$100K/year.
The problem of course is that people like the big dollar amounts, including myself. Edit: and I think this is where they make money off people's greed.
Who was talking about micros? The 150K account is for the minis, IIRC, and that is what Secret Sauce was showing in his charts.
That is why I was screaming about ONE CONTRACT! Not a micro on a 150K account, but a mini on a 150K account.
AFAIK, you're free to trade whatever you want. 15 contracts mini or micro. I would only say micro because then you get flexibility in scaling in. It's much tougher to hit the right entry on one contract.
15 mini contracts on a 150K account is total suicide. It is outrageous, and this is one reason these prop firms should amend their rules, or be shut down. That is reckless abandon. If they want to push the 15 NQ idea on newbie traders, then THEY should be 100% liable for their own BS. There should be ZERO charge to the newbie to try this fuckwad idea. It is the dumbest idea in the universe for the newbie, but the BEST for the prop firm.
I'm not sure I agree. Everyone is in this to make a lot of money. Doing it within the confines of this type of program teaches you that you are probably not going to make a lot of money. It's a cheap lesson compared to what would happen if you started trading your own account with similar dreams.
That is ABSOLUTE TRASH!
If you start the trades on the smart conservative path FIRST, and don't let them get into those bad habits to begin with, then there will be less pain for everyone involved! These firms are trying to instill BAD habits into newbie traders, by suggesting crap like 15 contracts on a futures contract like NQ or ES, without explaining how fucked up that idea is! NO! They should be teaching them PRM by allowing them only ONE contract, and allow them to actually make money for the firm!
I know that has been gone over already, the firms do not want profitable traders, they want sheep to keep paying them the monthly fee.
Because they are too lazy to help others make money with them, side-by-side. That is too much work. They find it easier to make money for themselves by having all of their clients fail over and over, and they reap the reset fees over and over, while the propfirm reps sit in their cubicles playing solitaire all day long.
Here is how I see it from the perspective of these firms.
1. They want successful traders because if they have traders that pass their ridiculous rules, they are either really good or really lucky. 20% of $100K/year is WAY better than $150/month from that trader or whatever they are charging. The minimum trading days is meant to separate lucky from consistent.
2. If the prospective trader is not successful, they need to be compensated for building a safe environment for the trader to fuck up. That's the subscription fee.
There is a little bit of "yeah most traders are gonna fail, oh well". I agree with that. I don't REALLY see the firms being against passing good traders. I am sure they would prefer 100% of the traders pass their tests.
If you can consistently make money with a max 3K drawdown that you _never_ hit, you are a good trader. They would want you to trade their money. That's it. Most people cannot do that.
PS: I watched one of the morning sessions from TopStep, it's actually really good information. I don't trade like them, but it's absolutely possible to make money following their house style.