Topsteptrader

[trader99]

Hey Guys,

Here's the deal. I did the math for Pulsar Capital and TST.

Pulsar Capital - Is WAY MORE conservative on its risk management. Maybe that's a good thing or not depending on your style.

They start you out with $150K with 1.5% DD. That's only $2250 DD. But realize you are really only trading one lot due to their very conservative calculation of max position size.

From their website:

Example 2 (Future contract): let us assume that your account value is equal to USD 100,000 and you decide to open a position on the E-mini Nasdaq 100 (NQ), currently trading at 2400 points. The nominal value of this instrument would be equal to USD 48,000 (2400 x 20) and, therefore, your maximum position size would be of 2 contracts (100000 / 48000).

But your BP increases really quickly. $40 for each $1K profit. Basically, you "only need" to make $25K to have a $1M in BP. 25*40K = $1M.

Now, $1M sounds like a lot, but by their max position size calculation you really only trading 10-12 lots depending on the value of the contracts(YM,ES,NQ,ZN) you are trading. With $1M you would have $15K max DD.

Some of you would be saying, geez, with $1M BP there's no way I'll be doing just 10-12 lots. I would be swinging 100 lots or more. Perhaps, but they are very conservative with their risk management.

TST:

On a $150K acct, they let you trade up to 15 lots! Which means $10K margin per contract. Which might or might not be enough rope to hang yourself.

In either case, if a trader can consistently meet either Pulsar or TST criteria, why would they want to trade with them? These are very high Reward/Risk ratio. If you are consistently making 4% and risking only 1.5% then holy crap you should be a professional hedge fund manager! Maybe that's one way to get into the hf world if you can show you produced such high Sharpe ratios..

I think these are nice metrics to strive for yourself. No need to pay these places the simulator fees. Just use any number of free simulators out there and practice until you are able to consistently hit these metrics(R/R). Then get a real account and trade your way to financial freedom so to speak. hehe. Or if you don't have cash then join them and build up the account either way.

The only thing I think they are useful is as a call option. You are trading OPM. So, when you are down(which happens to all of us) then it's their money so to speak.. And perhaps these strict rules will make you are more conservative trader. Let's say you have enough cash to do 10-12 lots. Let's say you based on $10K margin per futures contract(to be on the medium side and not the $500 margin of the super risky types). So, you will still need to come up with $100-$120K of your own money.

Or say you go on $5K margin that's still $50-$60K account. And when you are down swinging 10-12 lots onf $50K account you are running into higher risk of ruin because not enough cushion to recover.

So, let's say you have $1M account. You are down $10K which is still below the $15K cut off(1.5% max DD), you still got $990K balance and would only have your # of contracts reduce to probably 8-9. Which you should be able to recover your $10K loss. Whereas on your personal account of $50K, if you are down $10K you are down to $40K. To be swinging 10 lots you are now playing with $4K margins.


So, you trade with these guys you are only risking the entry fees. That I get..

 

[austinp]

Austin,

You don't have to answer, but did you make money trading the Russell this past week? If so, why don't you try a combine where once you spot a setup in the Russell, you place the trade in the ES? The percentage moves won't be the same, but the directions are highly correlated.

If you're making money in the Russell in most 10 day time frames this year, I'm sure it wouldn't take more than a few combines for you to be funded. Then, you would have your funded account with an unlimited timeframe.

The challenge with strategy you propose is this: TF intraday ranges are 300% to 400+% greater than ES ranges on a dollar-per-contract basis. So an $800 per contract directional move in TF from swing low to high (or high to low) might only be $225 per ES contract in parallel. TF moved more than far enough to book substantial profits, while ES didn't go anywhere at all.

If I wanted to work much harder for lesser returns, I would trade the ES on higher timeframe charts looking for one - two entries per session and try to ride the directional range moves. Weeks like the one past where ES sessions did not exceed 10-point total ranges several times make it damn hard to gain traction inside 10-day windows. Several weeks ago when ES was cruising 20+ to 40 point daily ranges, completely different story.

Same traders, same strategies, different markets. A week of ES sessions from 16 points to 30+ points versus a week of ES sessions 10 points or narrower total are two completely different, unrelated experiences.

 

[austinp]

Again, I've said this over and over, it's not the p&l target that is getting guys, it's the max daily drawdown.

I'm sure there are no business owners on this thread but from a business owner's perspective TST does want guys to succeed. They actually need guys to succeed or the business model is not sustainable. It's the same reason Vegas wants "some" people to win at their casino. When you hear the slot machines making noise around you it only incentivizes you to keep putting your quarters and playing more. If nobody ever won at a casino, nobody would go.

The max daily drawdowns get hit while combine traders are struggling to make pace towards the minimum profit mandates to get funded. If there was no deadline to hit minimum profit objectives, more traders would stay within downside risk parameters while moving towards unpressured performance mandates.

I've said this over and over, and over. Once combine traders find themselves hopelessly behind the minimum profit objectives, they have no choice but to toss risk aside and gamble to pass. Yes, almost all combine participants are paying for sim solely because they want to get funded. Damn few if any people are paying for combines simply to "test how they measure up". That is nothing more than salespeak along the way. If you find yourself on day eight or nine or ten with all parameters met except for the profit target, you are going to throw caution away and roll the dice to pass. Straight up truth.

If TST want a helluva lot more traders to succeed, the solution is simple and stares them right in the face. Keep all risk parameters the same, keep profit objectives the same... ditch the 10-day or 20-day hanging anvil. Just let the traders inch along until risk limits are broken OR profit targets are met, whichever comes first.

However long a period of time that takes to happen. Very simple.

 

[Maverick74]

Maverick, there is no need to leave people with no options. It has been 10 days and 20 days options. So why make it only 10 days? To force people who do not pass to take new combine more frequently?
To make those targets within 10 days would require to take more risk. Their live parameters are pretty much very risk averse.

Also, constant changes is not exactly casino. In casino rules are same for centuries. TST has managed to change practically everything within less than a year coming with something new every 2 months or so. There is nothing permanent with them.
It is very confusing.
After they introduced trailing equity stop there frankly were no reason for other parameters outside of daily loss limit.
Target, daily loss limit and trailing stop. It is all that required.
Also, they are not exactly funding traders.
As I stated, they are risking only $1500-2000 on a trader and the rest comes from trader's own good trading aka cushion trader builds. Good trader can do same without need for so called backer cause they are not backers. It is other traders who pay Combines back funded traders.
Were they truly interested in traders to succeed they would not put traders constantly under duress and confusion due to constantly changing rules and requirements. It increasingly looks like Ender's game. However Ender was not supposed to be like this all his life. Successful traders are supposed to do it long term..,.
Markets are stressful enough , no need for even more confusion.
I believe it is in TST interests to actually choose something and stop meddling with it constantly. Otherwise they might kill their golden geese.

Holy Cow, honestly man, nobody was using the 20 day. And I'll bet dollars to doughnuts very few if anyone passed it. I think they realized that and stopped it. Yes, choices are good but honestly, that was a good move on their part. Second, technically they are risking more then 1500 to 2000. I won't testify in court for it, but Michael Patak was on this forum awhile back saying that when a guy gets sent back to the combine, his debt gets erased and he starts over again. He "claimed" they would erase a guy's debt up to 5 times. That raises that amount to 10k for a small combine and goes up to 25k to 30k for the larger combines. Keep in mind, once you pass and go live, if you stumble and go back to the combine, there are no combine fees anymore and they eat the debt each time.

I also disagree with you about taking more risk. Look, I get a little condescending on here from time to time about the lack of basic math and algebra skills by the avg ETer but it's easier to make more money in shorter times frames then less money in longer. If you plot p&l on an x/y axis with time being on the x axis you will have a negative slope. That will graphically explain to you that your p&l as a function of time as diminishing returns. In other words, the less time the better. It has nothing to do with risk. You can keep risk fixed. If you don't believe me, plot it out for yourself and you will see.

I'm not sure I understand this stress argument and not understanding the rules, they are pretty straightforward. I do agree, less rules are better, but it's not the rules are hurting people. That's a defense mechanism. At the end of the day, you can fund your own account. And you should fund your own account. Some of you guys are acting like this is some kind of government welfare program and you are entitled to get backed. Easy solution, put your monies up and start trading. There is obviously a reason guys are choosing not to fund themselves. And maybe doing a few combines will go a long ways in helping guys conquer those reasons and have the courage to go out on their own.

I personally think this firm is drowning in debt thought. I said this awhile back on here, the biggest mistake any young company can do is expand payroll too fast. This went from a few people running this operation to like 40 people now. They will drown in that overhead and I suspect they are trying to make this combine easier and easier to keep the business afloat.

 

[Maverick74]

The max daily drawdowns get hit while combine traders are struggling to make pace towards the minimum profit mandates to get funded. If there was no deadline to hit minimum profit objectives, more traders would stay within downside risk parameters while moving towards unpressured performance mandates.

I've said this over and over, and over. Once combine traders find themselves hopelessly behind the minimum profit objectives, they have no choice but to toss risk aside and gamble to pass. Yes, almost all combine participants are paying for sim solely because they want to get funded. Damn few if any people are paying for combines simply to "test how they measure up". That is nothing more than salespeak along the way. If you find yourself on day eight or nine or ten with all parameters met except for the profit target, you are going to throw caution away and roll the dice to pass. Straight up truth.

If TST want a helluva lot more traders to succeed, the solution is simple and stares them right in the face. Keep all risk parameters the same, keep profit objectives the same... ditch the 10-day or 20-day hanging anvil. Just let the traders inch along until risk limits are broken OR profit targets are met, whichever comes first.

However long a period of time that takes to happen. Very simple.

I could not disagree more. Traders need to approach this as a process, a long 6 to 12 month process. It's not about "winning." If guys have so little discipline that they toss risk and caution to the wind just to "win" a combine, I would never back those guys. Look, I've said this before, if they are close and positive they will get a free rollover and do it again. They can't fucking wait another 10 days? Did you ever go on youtube and watch the "marsh mellow test" It was a famous experiment done in the 1960's that shows absolutely without a doubt the correlation between success and delayed gratification. Those young children who had the patience and discipline to think long term and not act on impulse became far more successful in life then those who were impatient. If you have so little self control that you go batshit crazy the last 2 days of a combine just to pass the stupid thing, then you are failing the marsh mellow test.

 

[Maverick74]

The challenge with strategy you propose is this: TF intraday ranges are 300% to 400+% greater than ES ranges on a dollar-per-contract basis. So an $800 per contract directional move in TF from swing low to high (or high to low) might only be $225 per ES contract in parallel. TF moved more than far enough to book substantial profits, while ES didn't go anywhere at all.

If I wanted to work much harder for lesser returns, I would trade the ES on higher timeframe charts looking for one - two entries per session and try to ride the directional range moves. Weeks like the one past where ES sessions did not exceed 10-point total ranges several times make it damn hard to gain traction inside 10-day windows. Several weeks ago when ES was cruising 20+ to 40 point daily ranges, completely different story.

Same traders, same strategies, different markets. A week of ES sessions from 16 points to 30+ points versus a week of ES sessions 10 points or narrower total are two completely different, unrelated experiences.

Your math is off here. Just trade two ES for every Russell, problem solved. You are making this harder then it is. The OP made a good point, if you can mint coin trading TF, the ES is about 90% correlated, trade 2 contracts per TF on the same signal. Done and done.

 

[nemesis45]

You are just suggesting the worst case loss for TST, which is really really low probability, of course which is why their model works.
Average risk per live trader may be a better criteria.

I like the new profit objectives. sadly, got a job at a real prop here, so no longer desperate .
It would be more interesting if the trailing max. drawdown, for 100kUSD and 150kUSD was more.
It's good for 30k and 50k combines.

What is TF? = russell? how is the liquidity

 

[Kacer]

Weeks like the one past where ES sessions did not exceed 10-point total ranges several times make it damn hard to gain traction inside 10-day windows. Several weeks ago when ES was cruising 20+ to 40 point daily ranges, completely different story.

Same traders, same strategies, different markets. A week of ES sessions from 16 points to 30+ points versus a week of ES sessions 10 points or narrower total are two completely different, unrelated experiences.

Less than 10 point travel ranges?

Here's the 9:30-4:00 travel range for each of the past 10 days and the corresponding 10 day average range:
May 12 - 11.25 range for the day, and 14.43 ten day average range
May 13 - 6.50 and 14.08
May 14 - 11.00 and 13.88
May 15 - 22.50 and 15.00
May 16 - 14.25 and 15.05
May 19 - 13.75 and 14.48
May 20 - 16.00 and 14.70
May 21 - 12.00 and 13.95
May 22 - 11.25 and 13.10
May 23 - 8.25 and 12.68

Starting from January 13 of this year (I missed a few days at the end of December) the 10 day average has been under 13 only twice. January 13 at 12.63 and May 23 at 12.68. That's a solid four consecutive months above 13.00. And all are above the 10 point range you complain about them being under.

If the ES is only tradable when there is "a week of ES sessions from 16 points to 30+ points," you're not going to do much trading. The average of 16 and 30 is 23. Since August 14, 2012 (leaving out the 4 days in Dec2013 that I missed) there have only been FIVE days when the 10 day average range was above 23. Five days in 21 MONTHS. And since 8/14/12, there have only been 12 days when the single day range was 30+. Why would anyone allocate capital to a trading plan that is traded so infrequently?

Untradable markets? If you tell yourself something can't be done, you will be right. If you tell yourself something is doable and commit to the research, you will be right.

 

[cornix]

I admire people who are able to demonstrate consistent performance within 10 day-period. Must be the very best proof of all that great futures day traders exist.

 

[Maverick74]

Less than 10 point travel ranges?

Here's the 9:30-4:00 travel range for each of the past 10 days and the corresponding 10 day average range:
May 12 - 11.25 range for the day, and 14.43 ten day average range
May 13 - 6.50 and 14.08
May 14 - 11.00 and 13.88
May 15 - 22.50 and 15.00
May 16 - 14.25 and 15.05
May 19 - 13.75 and 14.48
May 20 - 16.00 and 14.70
May 21 - 12.00 and 13.95
May 22 - 11.25 and 13.10
May 23 - 8.25 and 12.68

Starting from January 13 of this year (I missed a few days at the end of December) the 10 day average has been under 13 only twice. January 13 at 12.63 and May 23 at 12.68. That's a solid four consecutive months above 13.00. And all are above the 10 point range you complain about them being under.

If the ES is only tradable when there is "a week of ES sessions from 16 points to 30+ points," you're not going to do much trading. The average of 16 and 30 is 23. Since August 14, 2012 (leaving out the 4 days in Dec2013 that I missed) there have only been FIVE days when the 10 day average range was above 23. Five days in 21 MONTHS. And since 8/14/12, there have only been 12 days when the single day range was 30+. Why would anyone allocate capital to a trading plan that is traded so infrequently?

Untradable markets? If you tell yourself something can't be done, you will be right. If you tell yourself something is doable and commit to the research, you will be right.

No, no, no. Your numbers are off. That is not the formula Austin uses. OK, take those numbers you listed, and take the sq root of each of them. Then subtract 2. And finally round up to the nearest whole number. So if there is a 14 handle range, the sq root is 3.75-2=1.75 which rounds up to 2. That is the real"travel range" for the day using the "all I ever do is make excuses for my failures" method. I mean who can make money trading 2 handle travel ranges. (sarcasm off)