I've made the "scaling up" argument to myself numerous times to justify taking a crack at the combine, and yes in many ways mathematically it would be better to just trade one's own account if one did in fact have a net positive strategy and the necessary capital. I think there are 2 issues - one is money, the other psychological.
The money issue is that while it may be easy to get futures leverage, having the capital to weather the bigger swings might not always be there, even for decent traders.
But the other issue, and the bigger one imho, is the whole psychological aspect. Why do people pay for ongoing gym memberships and pay personal trainers when they could have an entire gym in their basement for a tiny fraction of the cost. Why do people pay thousands of dollars for tutors or coaching when they could just read the books and apply the lessons themselves? There examples are infinite, but the fact remains that people want (and more importantly NEED) the discipline imposed by a TST system (no big drawdowns or back to combine, etc, etc) because they can't go it alone. We could argue whether that is a fatal flaw, perhaps it is, but accountability goes a long way and the cost of the TST Put, if you could call it that, is never too high if it can turn a marginal/losing trader into a net profitable one (by enforcing good habits).
More anecdotal, while I always kept/keep up capital to ensure 100%/95% payouts, I knew guys that had no-cap-deals where they would get millions in bp but only keep 60% of the profits (trading equities). I do not know whether they just didnt have the capital themselves or whether they were just comfortable with the arrangement, but I guarantee there was something there (or not there!) psychologically that limited them from putting up the necessary amount to get 100% payout. (Or perhaps they were on a draw, not entirely sure) But in any case they were making good money, so I don't think you could say it wasnt working.
While it is probably never mathematically optimal, it is undeniably better to accept one's limitations and put in procedures to accommodate them rather than pretend they don't exist.
The money issue is that while it may be easy to get futures leverage, having the capital to weather the bigger swings might not always be there, even for decent traders.
But the other issue, and the bigger one imho, is the whole psychological aspect. Why do people pay for ongoing gym memberships and pay personal trainers when they could have an entire gym in their basement for a tiny fraction of the cost. Why do people pay thousands of dollars for tutors or coaching when they could just read the books and apply the lessons themselves? There examples are infinite, but the fact remains that people want (and more importantly NEED) the discipline imposed by a TST system (no big drawdowns or back to combine, etc, etc) because they can't go it alone. We could argue whether that is a fatal flaw, perhaps it is, but accountability goes a long way and the cost of the TST Put, if you could call it that, is never too high if it can turn a marginal/losing trader into a net profitable one (by enforcing good habits).
More anecdotal, while I always kept/keep up capital to ensure 100%/95% payouts, I knew guys that had no-cap-deals where they would get millions in bp but only keep 60% of the profits (trading equities). I do not know whether they just didnt have the capital themselves or whether they were just comfortable with the arrangement, but I guarantee there was something there (or not there!) psychologically that limited them from putting up the necessary amount to get 100% payout. (Or perhaps they were on a draw, not entirely sure) But in any case they were making good money, so I don't think you could say it wasnt working.
While it is probably never mathematically optimal, it is undeniably better to accept one's limitations and put in procedures to accommodate them rather than pretend they don't exist.
