Topsteptrader

[ScalperJoe]

For the love of god they are offering 80% split and eat losses, THEY make the rules not YOU.

Of course they make the rules! Nobody is disputing that.

Let's go over the flaws with your post:

1. "They are offering 80% split and eat losses."

Yes, they are going to eat losses, but ONLY during the first 10 days of the live account! Obviously you did not thoroughly read the funded trader rules. During, and ONLY during, the first 10 days of the live account, they will "eat losses." In other words, if you start trading live and go negative, you are not responsible for those losses.

However, once you start trading on the 11th day, you MUST be net positive, and on that 11th day going forward, that positive "cushion" is YOUR profit. If that profit goes back to a "zero" balance, then you are sent back to the combine.

I already went over this example, but I'll do it again in case it wasn't clear: If you made $1k in during the first 10 days, then THAT $1,000 becomes the cushion. The 80% split applies to any profits withdrawn after the 11th day. They are NOT eating your losses post 11th day, since that $1k is YOUR cushion, you made that profit during the 1st 10 days. If you lose that profit, then you are done trading the live account, since you cannot go below a "zero" balance (in other words they do NOT "eat losses" anymore). If you managed to bring that $1k to $5k, that is YOUR new cushion. If you dip back to $3k, that is still YOUR cushion. They phrase "eat losses" after the 11th day applies to the 20% opportunity cost of not being able to take their 20% if you did not take a check, since they only take their 20% when a trader makes a withdrawal. However, the backer is not losing any maintenance equity required for you to trade the account.

 

[ScalperJoe]

what you are talking about. you have 6% profit objective with 2% daily stop loss and 3% trailing max drawdown. Let's say you risk 0.5% per trade. That gives you 4 straight full losers (you don't have to wait until full stop is hit) before you stop trading that day. It gives you 6 straight losers with full stop until the max drawdown is hit. Of course even expert traders have runs of bad form so they could get unlucky and take a run of losers right off the bat. If this happened then they have the option to get a full refund on the 10 day combine or take another one free as long as you dont break the rules. obv many will break the rules because they cannot control themselves or worst still didnt understand the rules. guess what? they dont want these people and they are very unlikely to be long term profitable.

2. You can make an infinite number of examples of win/loss ratios to pass the combine. What matters is how you can trade within the parameters of the LIVE account. The additional rules must be considered, such as the weekly max loss, which reduces the daily max loss to $600/day (or .4% risk per trade), while not only maintaining the profit cushion, but also making sure you follow the "scale up" plan.

I do agree with your point that "many will break the rules" due to a lack of control.

 

[ScalperJoe]

Have you actually read the rules?

https://topsteptrader.desk.com/customer/portal/articles/1950861-funded-trader-rules

You say a trader faces an uphill battle in the live account as they only get 10 days to build up a cushion. NOWHERE does it say you have 10 days to build up a cushion. There is no profit target in the funded trader rules. The 1st 10 days of funded account you just trade to the parameters they set, you dont need to push it as there is no profit target.

3. "Have you actually read the rules?"

Yes, I have, and although you may have read them as well, you don't understand them. So let's go over it again.

"NOWHERE does it say you have 10 days to build up a cushion."

"Achieve an Average Net P&L greater than $0 for each product traded (enforced on the 10th trading day)."

The above statement is DIRECTLY from the link you provided, obviously from TST's own rules!

So it is incorrect to state "there is no profit target in the funded trader rules." There IS a profit target, the target is simply the "cushion" you create within the first 10 days.

If you fail to create a profit cushion, then you cannot trade beyond the 10th day, since, by TST's own rules, you need to achieve an average NET P&L greater than $0 for each product traded, and that rule is enforced on the 10th trading day.

If you have no profit within the first 10 days, they you have no cushion to trade beyond the 11th day! And since you cannot trade back to a "zero" balance, then whatever profit you made within the first 10 days, BY LOGIC AND DEFAULT, becomes the cushion!

Sure, that "cushion" is not defined. It could be $100, it could be $1,000, or even $5,000.

The bottom line is this: those who fail to build an adequate cushion WITHIN THE FIRST 10 TRADING DAYS of the live account will not survive beyond the 11th day unless that cushion is large enough to keep trading and absorb losses, since, again, you CANNOT go back to a "zero" balance after the 11th day. Got it now?

 

[ScalperJoe]

The parameters are such that you wont pass if you rely on large drawdowns, scale in, average in etc. And guess what they dont want those traders. is it possible to make money having large drawdown, scaling in, yes absolutely.

I fully agree with you here. And as I've stated prior, the ability to trade out of a jam is one of the many attributes of a successful trader. TST does not allow for it, and that's their discretion, since as you said, "they don't want those traders."

However, it's faulty logic to think a trader will never get into a jam. It's how they exit that jam that counts.

There is little margin for error in the combine, the stats must be very good, which again, is understandable from TST's perspective. However, like I've said a dozen times already, one should examine the rules of the LIVE ACCOUNT and understand those rules, since the survival in the live account is the only way to take a check.

 

[londonkid]

Of course they make the rules! Nobody is disputing that.

some people in this thread are acting this way. you can read posts where guys say 'this rule is stupid' and this is why i think it is stupid. they then go on to propose their own amended rules.

Let's go over the flaws with your post:

1. "They are offering 80% split and eat losses."

Yes, they are going to eat losses, but ONLY during the first 10 days of the live account! Obviously you did not thoroughly read the funded trader rules. During, and ONLY during, the first 10 days of the live account, they will "eat losses." In other words, if you start trading live and go negative, you are not responsible for those losses.

However, once you start trading on the 11th day, you MUST be net positive, and on that 11th day going forward, that positive "cushion" is YOUR profit. If that profit goes back to a "zero" balance, then you are sent back to the combine.

I already went over this example, but I'll do it again in case it wasn't clear: If you made $1k in during the first 10 days, then THAT $1,000 becomes the cushion. The 80% split applies to any profits withdrawn after the 11th day. They are NOT eating your losses post 11th day, since that $1k is YOUR cushion, you made that profit during the 1st 10 days. If you lose that profit, then you are done trading the live account, since you cannot go below a "zero" balance (in other words they do NOT "eat losses" anymore). If you managed to bring that $1k to $5k, that is YOUR new cushion. If you dip back to $3k, that is still YOUR cushion. They phrase "eat losses" after the 11th day applies to the 20% opportunity cost of not being able to take their 20% if you did not take a check, since they only take their 20% when a trader makes a withdrawal. However, the backer is not losing any maintenance equity required for you to trade the account.

The way you are viewing trading a TST funded account is that any gains in the account are yours or your money. This is incorrect. All of the account, everything including all of the profits is property of TST. You are signing an agreement with TST that entitles you to 80% of the profits from that they own. This is not some piker pay to play outfit where you put down $5000 and trade the account for a split.

You seem to not be grasping the concept of conditionality here. TST is offering you the chance to trade $150k of their money (more if you prove yourself) on condition that you pass their test criteria (combine) and follow their rules. The rules are there to protect the equity partner (backer), he/she has to make a return on their equity.

Yes days 1 to 10 funded and the scaling plan are designed to build a cushion. It's not your cushion they own 100% of the account but you are entitled to take 80% at any time. It should be obvious to you that the idea with TST is to build up a cushion and never dip into it, this would allow you to fully utilise the account size they are offering and withdraw meaningful 80% profit splits. Going live and making a a couple of k cushion in their account (not yours lol) then even contemplating withdrawing is a piker mindset. For both TST and the trader to get the most out of the relationship it is necessary to trade up a reasonable cushion. For example $150k account trade up to $165k then take only sizeable 80% splits from profit above that figure.

we then have the hilarious concept that you could do this on your own with a $3000 amp account and keep 100% of the profit. Yes this is possible but the vast majority of people cannot follow simple money management trading rules, this coupled with the psychological pressure means it is a completely different proposition.

GT

 

[ScalperJoe]

rights so you think the daily loss rule is way to strict and you propose another rule (wtf?!?) that the trader should be allowed unlimited daily drawdown as long as end of day he is within the loss limit. You agree the backer would not want this rule as it exposes them to unlimited risk but say it shouldn't apply to the simulator (combine) to qualify for funded account. lololol.

dude this is insane. think about this. what would stop traders scaling/average/martingale in until they are good for the EOD max loss. they dont want traders who scale/average/martingale to get out of losses. Nearly every trade in drawdown will eventually come back to its entry at some point in time. lol.

I only provided my opinion regarding changing the daily loss intraday to EOD, and also added the caveat that the backer would NOT want to implement that rule in the live account!

Nothing would stop traders "scaling/averaging/martingale in until they are good for the EOD max loss." Actually, it's the daily max lot size that would stop the trader! It's not like a guy is going to continue adding 100 lots to b/e, lol.

 

[ScalperJoe]

The way you are viewing trading a TST funded account is that any gains in the account are yours or your money. This is incorrect. All of the account, everything including all of the profits is property of TST. You are signing an agreement with TST that entitles you to 80% of the profits from that they own. This is not some piker pay to play outfit where you put down $5000 and trade the account for a split.

You seem to not be grasping the concept of conditionality here. TST is offering you the chance to trade $150k of their money (more if you prove yourself) on condition that you pass their test criteria (combine) and follow their rules. The rules are there to protect the equity partner (backer), he/she has to make a return on their equity.

First, to claim you are getting "the chance to trade $150k of their money" is flawed. Where are you getting this $150k number? Where does TST put up $150k?

TST is going to back you with the following capital:

1. The maintenance margin required to trade whatever product you choose based on the scale up plan, plus the maximum allowable drawdown which applies to the first 10 days of the account. Beyond the 10th day, they are providing the capital for the maintenance margin multiplied by the maximum allowable lot size for each product traded.

2. The increased maintenance margin required guided by the rules of the scale up plan. This amount of maintenance capital is in theory unlimited depending on the ability of the trader to continue trading and build up lot size. THIS in my opinion is the true value of the live account, since it does not require ANY capital outlay from the trader.

 

[ScalperJoe]

It should be obvious to you that the idea with TST is to build up a cushion and never dip into it, this would allow you to fully utilise the account size they are offering and withdraw meaningful 80% profit splits. Going live and making a a couple of k cushion in their account (not yours lol) then even contemplating withdrawing is a piker mindset. For both TST and the trader to get the most out of the relationship it is necessary to trade up a reasonable cushion. For example $150k account trade up to $165k then take only sizeable 80% splits from profit above that figure.

we then have the hilarious concept that you could do this on your own with a $3000 amp account and keep 100% of the profit. Yes this is possible but the vast majority of people cannot follow simple money management trading rules, this coupled with the psychological pressure means it is a completely different proposition.

GT

"Going live and making a couple of k cushion in their account then even contemplating withdrawing is a piker mindset."

So if TST is the one saying you can take out profits at anytime, are you claiming they have a "piker" mindset?

I'd say TST is being fully reasonable in its terms of allowing a trader to withdraw profits at anytime. It's obvious that one needs to maintain some type of cushion in order to keep trading and not allow the account to bleed down to a "zero" balance.

You're saying that cushion needs to be 15k before making a withdrawal, and that's fine, it's your opinion. However, each trader has to make that his/her own decision.

 

[londonkid]

2. You can make an infinite number of examples of win/loss ratios to pass the combine. What matters is how you can trade within the parameters of the LIVE account. The additional rules must be considered, such as the weekly max loss, which reduces the daily max loss to $600/day (or .4% risk per trade), while not only maintaining the profit cushion, but also making sure you follow the "scale up" plan.

I do agree with your point that "many will break the rules" due to a lack of control.

I refer to the days 1-10 funded traded rules at https://topsteptrader.desk.com/customer/portal/articles/1950861-funded-trader-rules

it states that you must not breach your max daily/weekly loss or max trailing drawdown. its does not state what these figures are but I believe they will be the same parameters that were in your corresponding combine. i.e. 2% daily loss, 3% max trailing drawdown for the 150k 10 day combine.

It is very clear from this together with the scaling plan that they want you to trade very conservatively when you start as a funded trader for obvious reasons. A solid trader risking for example 0.5% (R) per trade in early stages of funding would need to make 20R risk to build a 10% account cushion. This would allow them to make meaningful amounts of profit am withdraw it.

worked example

150k account
trade up to 165k account = 10% cushion
achieve 2% per week profit = 8.24% monthly growth (4 weekly basis) = $13596 monthly profit
80% profit split = $10876
softwae/data/roundtrips to be factored in.

The trader then has the option to leave some of this profit in/renegotiate buying power to earn more.

 

[ScalperJoe]

The way you are viewing trading a TST funded account is that any gains in the account are yours or your money. This is incorrect. All of the account, everything including all of the profits is property of TST. You are signing an agreement with TST that entitles you to 80% of the profits from that they own. This is not some piker pay to play outfit where you put down $5000 and trade the account for a split.

When I claimed "YOUR" profit it's simply a way to differentiate between the 80% vs. the 20%. You are analyzing semantics here. Yes, you are trading the backer's account, just like when you trade with a licensed Series 56 firm, you are trading "FIRM CAPITAL" as part of an LLC agreement which you sign, and which you ALSO agree to a profit split that is clearly defined in that agreement. I'm sure the LLC agreement is very similar with TST/backer.