TopstepTrader and Patak Trading Partners- Any and all questions answered here

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Quote from hidethereal:

I have a question for TST/Patak as I'm interested in your program.

What are some of the qualities and characteristics of the candidates that have succeeded and obtained funding and those who have failed?

Also, I read something about an additional $5,000 fee or deposit of some sort. Can you elaborate on how that works?
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The TopstepTrader program looks to separate traders from gamblers. We look for traders who are disciplined, risk averse, patient, and have a proper understanding of how markets move.

Specifically, most of our funded traders are proficient in trading one product only, make limited trades per day, and most of the funded traders set self-imposed daily loss limits which are less than what is required by Patak Trading Partners.

Those who fail the Combine tend to show impatience, aggressiveness, lack of discipline, and often times do not have a trading plan or do not adhere to their trading plan, self-destructive tendencies, and greed.

Specifically, recruits who fail often tend to trade their maximum position size, total contract trades per day are very high, and do not have a "shut off valve" when they are up money as well as continuing to trade with a negative p&l in an attempt to recoup losses.

As for your question in regards to a $5K deposit, there is NO capital contribution required from funded traders. Patak Trading Partners funds the trading account AND absorbs ALL losses beyond the initial account balance.

As a funded trader, before a withdraw can be taken, there must be an account cushion of $5K for $30K or $50K accounts or $10K for $100K or $150K accounts. The $5K or $10K cushion must remain in the account as long as the trader is trading the account. This is to protect the trader from taking the account into the negative, if the trader experiences a rough patch following an account withdraw.

If for ANY reason a trader leaves the Patak Trading Partner's account, then the trader will receive their full share of the account cushion ($5K or $10K). When the trader requests a withdraw, Patak Trading Partners will take a withdraw at that time as well. Patak Trading Partners will NOT take a withdraw from the account unless the trader requests a withdraw.

PS. There are a lot of question on this forum, to ensure your questions get answered, both myself (+1(312) 212 0481) and Brian Welsh (+1(312) 252 9858) as senior scouts are available to answer your questions. Please call our Trading Floor desk line during normal market hours. Thanks.
 
Quote from MichaelPatak:

1) TopstepTrader is an trade educational firm and recruits talent for Patak Trading Partners. Patak Trading Partners is strictly proprietary capital and as such does not have to be registered with the NFA. I am registered as are others in our group but the Patak Trading Partners prop firm does not have to be as the funds are strictly proprietary.

2) We do not release that information.

3) Patak Trading Partners, LLC. is strictly a proprietary trading firm. Please review the NFA on the rules pertaining to prop firms that trade strictly proprietary capital.

4) As mentioned above I (Michael Patak) am registered. http://www.nfa.futures.org/basicnet/Details.aspx?entityid=cbLkLf7994M=&rn=Y

5) PTP clears Cunningham Commodities, LLC.

6) My involvement is I oversee the activities of the funded traders.

mp
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Additionally, Patak Trading Partners, LLC is a member firm of the Chicago Mercantile Exchange. Our registration information information can be found here: http://www.cmegroup.com/company/membership/membernet/files/20100216_CBT_Monday_mailing.pdf
 
Quote from SteveNYC:

The interview with M. Patak was très bien.

I listened to the entire interview and got good vibes.

He sounds like a Major League baseball player and not too shady.

:)

He states that his TopstepTrader program uses a performance based business model unlike the usual prop lite business model which uses the "deposit $5k, churn and burn, out the door in 3 months" business model.

This is a key difference.

So, if you are good, you continue to trade and progress.

If you suck, you are out of luck.

It's a profit based trading model similar to legit prop trading where you get paid so you could eat, have a roof, and clothes, and get a monster bonus if you are good. This beats the crappy transaction based prop trading where you are whipped daily to make a ton of trades and generate a monster commission. I call this "transaction based" business model a "pimp n hooker" business model. You even have to pay $5k just so you could become a hooker. Dang.

At TopstepTrader, you don't have to pay the annoying $5k. Just a measely combine fee which might be refundable.

That said, it doesn't mention if you need to get the Series 7, 56, etc. licenses.
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Thanks for the analogy and for the reference of sounding like a major league ballplayer. That is what we feel like we are doing when we work with talent in our program and those trading live (funded traders)

We do look at TosptepTrader as the minor leagues and Patak Trading Partners as the major leagues. Just like the professional sports model we are geared toward a performance base model unlike much of the trading industry with its transactional based business model. Nothing wrong with how others do, just not how we want to discover talent.

So to answer your question you do NOT need to be licensed when trading for any firm that is strictly proprietary capital. Our majors or Patak Trading Partners is strictly proprietary capital.

mp
 
Michael,
I appreciate that you've taken the time to answer my questions. However, your answer raises a lot of other questions. It is my understanding you've had a large number of recruits pass the combines. If you don't have 12 traders who've cleared at least 30k then doesn't that suggest that you may not be giving those traders the "tools" needed to reach consistent success? Your minimum combine requires 4k to pass. You've been around for over 2 years. By what metric are you judging that you're producing successful traders? Because it seems to me that you are not.

I think the problem is that your recruits have unrealistic goals and not enough capital. At the minimum level, you're only funding at $1,000 but your giving those recruits a $500 max risk limit. I think the honest thing to do would be to raise that risk limit to something reasonable, like $4,000 or to reduce the max risk limit to something like $125-$150. You've create an impression of a much higher funding level on your website for the entry fee then you actually deliver. For example, most people would not expect their daily risk limit to be 50% of their total risk capital, one would expect that to be in the 4x-8x range. Likewise, you suggest that you're funded at 30k but you only can have a 1k dd on 30k or 3%. I don't think any trader would anticipate that if he were funding with a 30k account that he'd only be able to risk 3% before being cut. A 30% risk on the capital would be $9,000 and that would be realistic.

Also, I'm one of the few traders who might both be able to pass the combine and produce consistent profits for you. The problem is that you don't offer enough risk capital to make it worthwhile. I only need to do 1/4th what your target goal is in the live markets to produce the same return. At the lowest tier level, the trader is only really receiving $825 in non risk funding because they put up almost $200 at risk.

How do you plan to address these inadequacies? What do you say the trader who says, you know what if I can find just $800 bucks to laying around then I keep 100% profits for myself and don't need to meet any objectives? Again, I strongly suggest you raise the risk capital to the monthly profit objective or at least 5x the max risk limit if you are serious about producing traders versus generating combine fees.
 
Quote from traderCND:

Are you serious??

You ask potential traders to send you money but you won't even say who owns the firm we would be sending it to?

There is an element of trust involved in that if we pass the combine we will be given a backed account...but you refuse to say who we should trust. I think knowing the backgrounds of the players goes a long way. For example, have they ran successful trading firms or is Oliver Valez involved? It would be nice to know.
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We do NOT ask traders to send us money for Patak Trading Partners. We never have and never will. We are not like other prop firms out there that ask for $5k risk deposit and make you a member of their company or however it works with them. The funds that traders trade at PTP is strictly proprietary capital. Meaning not customers, traders or a pool of investors.

TopstepTrader which is a trader education group. Holds a small deposit (avg $200) that gets returned to you when you get brought up to Patak Trading Partners (or what I have been calling the major leagues, TopstepTrader being the minor leagues).

Therefore we do not release the owners of the companies as NO trader has a stake in either company. Traders are given an opportunity not asked to give funds to continuing showing they can traded with PTP's proprietary capital.

I hope that clears it up a bit.

mp
 
Quote from MichaelPatak:

Additionally, Patak Trading Partners, LLC is a member firm of the Chicago Mercantile Exchange. Our registration information information can be found here: http://www.cmegroup.com/company/membership/membernet/files/20100216_CBT_Monday_mailing.pdf
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Michael,

According to the link you supplied you are a "CME Rule 106.H. Trading Member Firm". According to this link: http://www.cmegroup.com/company/membership/files/Corporate_Membership_benefits_and_requirements.pdf :

1. The sole purpose of this membership is to "allows firms to obtain preferential clearing and Globex fee and performance bond rates on their trading of CME products" . Clearly you are not passing those on as has been stated in numerous posts.

2. 106.H firms "Are not subject to CME capital requirements, periodic financial statement reporting or financial and compliance examinations." So holding yourself out as a member like that adds credibility or a sense that you are regulated is not correct and misleading. 106.H simply means you are a preferred customer for rates.

3. BUT WAIT, THAT SAME LINK SAYS 106.h FIRMS "May not hold themselves out as members of the Exchange."!!!!! SO WHY ARE YOU DOING THAT???

YOU MIGHT NOT WANT THE CME TO SEE YOUR POST OR YOUR PREFERRED RATES MIGHT BE TAKEN AYAY AND YOU WON'T BE ABLE TO MARK UP THE FEES TO YOUR TRADERS!!!
 
Also, here is a link to the application to become a CME Rule 106.H. Trading Member Firm: http://www.cmegroup.com/company/membership/files/Rule106HCorporateMembershipApp.pdf

Basically you write your name down and agree to certain criteria about how you treat your traders. One of the stipulations is:

"The firm may not allocate expenses to trades or traders in excess of actual direct and indirect expenses of the individual member firm trades or traders. Only actual expenses incurred may be allocated – a mark up on expenses is not permitted. Further, opportunity costs may not be allocated. CME Rule 106.H. must maintain and provide adequate
supporting calculations and documentation of such allocated expenses and their reasonableness."

This clearly says that Patak cannot mark up trades and as a trader you have the right to demand to see what the costs are.
 
Quote from traderCND:

Also, here is a link to the application to become a CME Rule 106.H. Trading Member Firm: http://www.cmegroup.com/company/membership/files/Rule106HCorporateMembershipApp.pdf

Basically you write your name down and agree to certain criteria about how you treat your traders. One of the stipulations is:

"The firm may not allocate expenses to trades or traders in excess of actual direct and indirect expenses of the individual member firm trades or traders. Only actual expenses incurred may be allocated – a mark up on expenses is not permitted. Further, opportunity costs may not be allocated. CME Rule 106.H. must maintain and provide adequate
supporting calculations and documentation of such allocated expenses and their reasonableness."

This clearly says that Patak cannot mark up trades and as a trader you have the right to demand to see what the costs are.
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traderCND: This is the commission charged by our clearing firm. I have already stated this in a prior post.

Thanks

mp
 
There have been a lot of great questions. I do encourage anyone who would like their questions answered about TopstepTrader and or Patak Trading Partners via phone to call:

John Hoagland at +1(312) 212 0481

or

Brian Welsh at +1(312) 252 9858

Both senior scouts are available to answer your questions. Please call our Trading Floor desk line during normal market hours.

Also each Tuesday and Thursday I am on our live broadcast for a session we like to call DRILL A SCOUT at noon CST. I answer these type of questions in front of our recruits, traders and guest. This takes place in our TST Squawk radio (chat room with audio feed) live from the CBOT trading floor.

You can enter Thursday as a guest (this is free) or signup for the free warm up here (http://www.topsteptrader.com/membership) which will give you a 2 week access.

Thanks.

mp
 
Quote from Lucias:

Also, when the trader is sent back to the combine after trading live, do they have to pay for the combine again or is it free for 1x or forever for them?

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There is no additional fee for traders who are moved back to the Combine after being taken live. The Scout Team acknowledges that circumstantial events could cause a funded trader to be taken off of an account. This in no way means that an individual's funded opportunity is over. When entering into this relationship, we want the trader to understand our willingness to stake them as well as continually provide them an opportunity to earn the funded account back at NO expense. Should a trader who has been selected for a funded account be sent back to a Combine, ALL deposit requirements for future Combine are waived.
 
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