TopstepTrader and Patak Trading Partners- Any and all questions answered here
- Thread starter MichaelPatak
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Hey no worries? I'm a big boy, I can handle it... ...LOL...
Hopefully I get a good run and don't look like a total clown but if I do it's all part of the game. You win some you lose some!
Thank you... I will...
We're supposed to start around Monday or Tuesday... So far I haven't gotten the log in details. No big deal, it's the weekend.
Do you know which combine you will you be doing?
Yes... I will be doing a 10 day Combine with $1000 stop loss limit and a $3500 overall profit target to qualify for funding in addition to meeting the other criteria. Maximum position size will be 5 lots.
In your example, the 40k of "open profits" is split, at 24k to the trader, and 16k to the investor (on the 60/40 model).
PTP won't take a distribution unless the trader takes a distribution. Therefore, in your "greater extreme" example, the max loss risk is WELL ABOVE the 2x daily max loss risk, since the investor is willing to forgo 16 grand, PLUS another 2 grand below the starting balance (whereby the trader lost 24 grand).
With the Chicago firms that back traders, is there any distribution requirement after hitting a certain watermark?
It would seem nonsensical from both the investor's and trader's perspectives if there is no distribution schedule after the 5k profit cushion is built in.
See, they don't look at it that way and it's why I posed the question to them about monthly payouts. They don't see that 40k in open p&l as their money yet therefore you are not losing their money. They only see it as their money when you take out a withdrawal. I personally think they should just liquidate the account every month. I've been in this business too long and see way too many guys give back p&l and their self confidence along with it.
At Chicago prop firms, you don't "take" money out. It's called a bonus. It's usually paid out at end of year with a few firms doing it quarterly. They make sure you have every opportunity to give back your p&l before years end. And in many cases, with some firms, they may not even give you anything if other guys took a large hit.
CoolTrader,
Sounds good, looking forward to reading your review of the combine, best of luck.
I think we're on the same page regarding monthly payouts. We're both familiar with equity props. If the 40k is not viewed as "their money", or at least the investor's portion of it, then their logic is different than every equity prop firm I know of that takes their cut either biweekly or monthly. It doesn't matter if the trader is up 10k or 1k or 100 bucks. Although the trader can carry forward their gains, the FIRM still takes their % cut.
Once a trader is profitable, PTP most likely views this as a liability on its books, since it would not know when the trader will request a distribution (if a trader quits before making the cushion), or when a trader who is above the cushion will request a check.
One trader who was viewing the TST model asked me about how their 5k cushion is protected once they go live. I wasn't sure so I posted the question, and Patak responded by clearly stating that two sets of risk parameters are in place, however there is always counterparty risk.
With the Chicago futures firms, you mentioned that they pay either quarterly or at year end, however PTP has no such distribution schedule.
You also mentioned that the Chicago firms retain a portion of the p&l, with PTP the 5k/10k profit cushion could be viewed as a "retainer" since the trader must overcome this hurdle before taking a check (unless they quit beforehand).
So if the investor is not viewing a trader's profits as "their money" until the trader requests a withdrawal, then how does the investor conduct an analysis of their potential return?
Keep in mind that if the trader wants to leave TST, they can at any time and get that "cushion" money paid out to them. At a typical prop firm, your cushion money is gone.
As far as how does the investor analyze their return, I honestly have no idea. This is the only part of their model that doesn't make sense to me. I think both the investor and the trader need to take the money when it's there at the end of the month. I honestly think TST and some of the complainers on this thread are making a bigger deal about the psychological effect of being sent back to the combine. If their emotions are that sensitive they probably won't make it as a trader anyway.
Yes. We have not had this happen as they have daily loss limits. For this size account they would have to max their daily loss out and lose for 40 days. We would step in and talk to them to find our what is what in that case.
mp
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