Since there are 5 Combine categories, but Live trading starts with 1,2 or 3 contracts max, that means 2 categories are being overpaid for.
I don't think it necessarily "means" that, actually; but I do agree with you that the $100k and $150k Combines appear expensive for what they are. I suspect that TST needs the income derived from those to cover all their administrative and other expenses.
I would probably choose the 2nd (30K) Combine, but start out with 1 contracts and scale in when there is profit for the day.
That sounds a very good approach to me.
Personally, I'd try the $50k one rather than the $30k, and trade a single lot, scaling in to the occasional two-lot and three-lot (maximum) trades when I found it appropriate.
I understand your reasoning, though, and I agree with it.
The reality is that many people
with profitable methods blow themselves out of Combines by trading too many lots for the size of Combine they're trading, when they would have done much better with more patience and time, by exercising their edge in smaller position-size, letting the profit accumulate more slowly. I
suspect (but without evidence for it, admittedly) that these aspiring traders perhaps overlap with the group who look at trading as being primarily about profit-maximization rather than risk-management, and that TST is therefore well rid of them at an early stage, before funding them.
But this combine still have the chance of getting only 1 car in the Live account.
To start with, yes.
And I see that that's a real disadvantage to some people. Some people even have basic methods which
require trading a minimum of three lots. And I suppose the answer to that is that they need to do $100k/$150k Combines in the first place - which we've agreed are "expensive".
I would also like to point out that there is absolutely NO DIFFERENCE between the 10 lot (4th) and the 15 lot (5th) combines (namely the 15 is 1.5 times the 10 in every category)
This is perfectly true.
The "anomaly" (if it
is actually an anomaly) arises a level lower than that, in the difference between the $50k and $100k Combines: between these two levels, the nominal starting-balance, maximum positiion-size, daily loss limit and profit target all correspond perfectly on a 2:1 ratio, while the maximum permitted drawdown
doesn't. I've never understood this "anomaly".
I predict TST will simplify it and go down to 3 types of combines in a year.
I certainly won't be surprised at all if you turn out to be right about that, too. I've never quite understood the reason for offering five different sizes of Combine: it does seem something of an "
embarass de richesses"?
