Topsteptrader

[dom993]

If you ran a prop firm that fully funded the traders, would you be looking for anything less than the top 1%?

I believe TopStep allows you to design a custom combine.

That's a good point

As you know, I am developing & trading fully automated systems ... I can either meet the P&L target, but need a larger DD to have a good statistical chance of passing, or I can meet the DD limit, but need a reduced P&L target.

Else, I play the Combine until the system finds a time window where it passes - but that's not statistically significant.

Anyway, my point was, over a period of 20 days, there is no way TST can make the difference between someone passing by luck, or someone being a true star.

What I believe, is that this Combine is as much of a money making machine for them, as it is of a selection tool. Good for them.

 

[nazzdack]

----Combine parameters....
----$190....
----make $35,000 per year....
----$2,000 drawdown max.

1) $35,000 per year assumes you are NOT increasing your position size.
2) FWIW, to my best interpretation and without going into extreme minutia, the $2000 drawdown "tops out" at $50,000 when your account value exceeds $52,000. If you keep growing the account, it's not an issue. If you go through a drawdown phase at that point, the $50,000 level does re-emerge as a "problem" if your account value gets near that figure. :eek:

 

[state0090]

I say to use them as training to trade futures which is what I did. I did not get live funded but greatly improved my trading. Had I have used my own capital to trade futures would have been a disaster.
A few facts from my time:
Almost all the funded traders have a financial background of at least 5+ years.
The combines are geared towards trading Crude oil because amongst other things its potentially huge daily reward to risk ratio. This is the only way to survive the drawdown/profit target requirements.
From various chat rooms, the "experts" advice to start trading stocks and/or options before moving to futures. If you haven't experienced it you will see why (hint it is set up for heavily capitalized individuals or corporations who have no SL or a huge daily SL).

 

[austinp]

$3500 target, $2000 max DD, say over 20 days. Aside from making it by luck, that translates into the ability to make $35,000 per year (20 days * 10) while staying inside a $2,000 drawdown max....

I can either meet the P&L target, but need a larger DD to have a good statistical chance of passing, or I can meet the DD limit, but need a reduced P&L target....

The combines are geared towards trading Crude oil because amongst other things its potentially huge daily reward to risk ratio. This is the only way to survive the drawdown/profit target requirements....

That is all true. The combine profit/loss limits demand a high-beta return with a low-beta risk approach. In the real world, if you want a 100% annual return (or larger) trading futures you have to accept a -30% to -50% drawdown potential. There is no way to hit 100% gains using a -2% or even -5% risk limit. Leverage and the laws of distribution do not work like that over time.

To pass a combine, one needs to hit a favorable stretch of market action where volatility and/or trends allow solid profit potential. If by random chance you pick a low volatility, sideways choppy period of time, you are screwed. Crude oil gives a better chance for frequent success than say ES, but both can be pancake flat and choppy for days at a time. That will kill your chances at a particular combine, due to the minimum profit requirements in a very limited window of time.

imo the educational process with demo money and real accountability have value for developing traders. The combine and potential funding have value for somewhat experienced to veteran traders in search of capital.

imo again, if the minimum profit parameter did not have a time limit and with all other combine requirements left intact, a lot more traders would successfully pass the test. 10 day or 20 days at pure random to hit such a high % profit to risk limit ratio is as much pure random luck in timing favorable price action periods as trader skill & ability.

 

[Maverick74]

That's a good point

As you know, I am developing & trading fully automated systems ... I can either meet the P&L target, but need a larger DD to have a good statistical chance of passing, or I can meet the DD limit, but need a reduced P&L target.

Else, I play the Combine until the system finds a time window where it passes - but that's not statistically significant.

Anyway, my point was, over a period of 20 days, there is no way TST can make the difference between someone passing by luck, or someone being a true star.

What I believe, is that this Combine is as much of a money making machine for them, as it is of a selection tool. Good for them.

Regarding the "luck" factor, you can say that about anything in life from sports to Hollywood to winning a Nobel Prize. A lot of success in life is about showing up and getting lucky. There is a saying though, hard workers sure tend to get lucky a lot.

 

[Maverick74]

$3500 target, $2000 max DD, say over 20 days. Aside from making it by luck, that translates into the ability to make $35,000 per year (20 days * 10) while staying inside a $2,000 drawdown max....

I can either meet the P&L target, but need a larger DD to have a good statistical chance of passing, or I can meet the DD limit, but need a reduced P&L target....

The combines are geared towards trading Crude oil because amongst other things its potentially huge daily reward to risk ratio. This is the only way to survive the drawdown/profit target requirements....

That is all true. The combine profit/loss limits demand a high-beta return with a low-beta risk approach. In the real world, if you want a 100% annual return (or larger) trading futures you have to accept a -30% to -50% drawdown potential. There is no way to hit 100% gains using a -2% or even -5% risk limit. Leverage and the laws of distribution do not work like that over time.

To pass a combine, one needs to hit a favorable stretch of market action where volatility and/or trends allow solid profit potential. If by random chance you pick a low volatility, sideways choppy period of time, you are screwed. Crude oil gives a better chance for frequent success than say ES, but both can be pancake flat and choppy for days at a time. That will kill your chances at a particular combine, due to the minimum profit requirements in a very limited window of time.

imo the educational process with demo money and real accountability have value for developing traders. The combine and potential funding have value for somewhat experienced to veteran traders in search of capital.

imo again, if the minimum profit parameter did not have a time limit and with all other combine requirements left intact, a lot more traders would successfully pass the test. 10 day or 20 days at pure random to hit such a high % profit to risk limit ratio is as much pure random luck in timing favorable price action periods as trader skill & ability.

Regardless of how hard it is or isn't, at this point over the last 3 years or so, my guess is over 1000 traders have passed the combine. One of the things I am struggling with here is why so many people on ET assume they WANT to have a lot of traders passing. In about 3 1/2 weeks one team is going to win the NCAA basketball tournament. ONE. A few weeks after that one golfer is going to win the Masters in Augusta, GA. ONE. There is a reason why we don't give trophies to the final 8 or the sweet 16 in the NCAA Tournament or the guys who finish in the top 30 at the Masters. It's because we reward the best. Not the average, the above average, not the pretty good, not the ones that "tried really really hard". I think this a fundamental concept on ET that just does not get through to 99% of the people here.

 

[volente_00]

Regardless of how hard it is or isn't, at this point over the last 3 years or so, my guess is over 1000 traders have passed the combine.

No way in hell that many have passed.

Maybe 2-3 a week max for last 4 years and that is being generous.

There is a reason there are very few live traders currently there and also why no one is making a living unless you consider less than 30k annually a living.

 

[Maverick74]

No way in hell that many have passed.

Maybe 2-3 a week max for last 4 years and that is being generous.

There is a reason there are very few live traders currently there and also why no one is making a living unless you consider less than 30k annually a living.

OK, so we'll use 600 traders using your numbers. Let me ask you something,do you honestly believe there are more guys on ET making more then 30k a year trading? I'm not talking about guys holding stocks in their IRA and 401ks, but guys actually trading. Hell, let me ask it this way. How many guys do you think there are on ET, percentage wise netting more then 30k a year trading only futures. I'm going to guess less then or maybe around 1%. I assume the same with Topstep.

 

[austinp]

One of the things I am struggling with here is why so many people on ET assume they WANT to have a lot of traders passing. In about 3 1/2 weeks one team is going to win the NCAA basketball tournament. ONE. A few weeks after that one golfer is going to win the Masters in Augusta, GA. ONE. There is a reason why we don't give trophies to the final 8 or the sweet 16 in the NCAA Tournament or the guys who finish in the top 30 at the Masters. It's because we reward the best. Not the average, the above average, not the pretty good, not the ones that "tried really really hard". I think this a fundamental concept on ET that just does not get through to 99% of the people here.

Well, if winning a combine is the ultimate final prize, then it's equal to playing a SuperBowl or Masters tournament up north in cold weather. Maybe you'll get nice weather conditions, maybe the weather will be brutal.

But if you're trying to find consistent traders who will make you money, once funded, for a long period of time... then it would seemingly make sense to operate the trial under exact-same conditions as funded status.

Maybe for some the idea of "winning" a combine is some sort of prize or accomplishment. To me it's nothing more than a job interview. The interview criteria versus the actual job in this case differs greatly.

 

[Maverick74]

Well, if winning a combine is the ultimate final prize, then it's equal to playing a SuperBowl or Masters tournament up north in cold weather. Maybe you'll get nice weather conditions, maybe the weather will be brutal.

But if you're trying to find consistent traders who will make you money, once funded, for a long period of time... then it would seemingly make sense to operate the trial under exact-same conditions as funded status.

Maybe for some the idea of "winning" a combine is some sort of prize or accomplishment. To me it's nothing more than a job interview. The interview criteria versus the actual job in this case differs greatly.

No, winning a combine is worthless. Becoming a profitable trader....priceless. Both are challenging.