Thanks for answering and clarifying these points!
Then it seems it's "better" to just take the normal 60% cut and withdraw regularly. Do they allow the trader to withdraw every 2 weeks(assuming there's profit and regular steady profits). Or monthly withdraw.
In light of these clarifying points, it seems their backing isn't all that. I mean it's not too bad if you don't have any capital and wanted to trade with their money so speak.
So, how are their commissions? Is it better than IB or higher?
With futures you don't need that big of an account to start generating cash flow if you know what you are doing and prudent with risk management.
So, let me get this straight. The prospective traders pay a few hundred bucks just to enter a "contest" to be eligible to trade with the firm's money under all sorts of rules some of which are probably wise and others hmm..
TST collects all that money upfront(I know I heard something about reimbursements,etc.) Then once you jump through those hurdles they fund your account from $30K to $150K. But given daily loss limit and max loss limit you will be kicked back into the Combine. On top of paying $85 monthly fees and possibly higher commissions.
I don't see how this is any different than the various prop trading shops in the old days(probably still now) where traders put up money to trade and use leverage. Except for lower account balances you don't front the money. They front it. But if you want a higher cut then you build up risk capital which in essence is your deposit money anyhow.
Same game. Slightly different structures.
While many hopefuls feed the slot machine with trying out Combines. And the few salmons who made up stream has to pay a desk fee(exchange fees) + possibly higher comms.
Tell me if my assessment is wrong..
Thanks!
It makes sense to take withdrawals regularly once you build the cushion, which varies depending on what combine you traded. You don't need to build 15k or 30k to take a withdrawal, those amounts are only for an increased payout percentage.
The profit objective is the minimum net account balance required to take a check as Senior Trader.
For example, once you reach Junior Trader, the account balance starts at zero. If you traded the 50k combine and you make Senior Trader, then at 2k you are eligible to take a check. On the 100k combine, it's 3k to make Senior Trader, which allows you to take a check. My understanding is the backer takes their cut only when you take yours, so it's a running forward balance until you either hit "zero" or take a check. Their rules even state that if you quit trading then they will automatically send you your cut.
The value of their backing is to eventually trade SIZE without risking your own capital. There are intangible benefits of trading other people's money. So the goal is to get Senior Trader status, where many factors become negotiable, including contract size, loss limits and products traded.
Of course, there is a cost, which may include increased mark ups on commissions, as well as exchange fees.
Your point about being "kicked back to the combine" is the most valid.
This is why there are repeated posts regarding the disconnect in TST's rules between the combine and funded Junior Trader.
If you're going to look for backing, then you must adapt to the Junior Trader rules by trading a combine to match THOSE rules, otherwise you're basically using the combine as a training tool.
My guess is most are looking at TST as a stepping stone to get backing, not simply as a fee-based sim account.
