Topsteptrader

[londonkid]

3. "Have you actually read the rules?"

Yes, I have, and although you may have read them as well, you don't understand them. So let's go over it again.

"NOWHERE does it say you have 10 days to build up a cushion."

"Achieve an Average Net P&L greater than $0 for each product traded (enforced on the 10th trading day)."

The above statement is DIRECTLY from the link you provided, obviously from TST's own rules!

So it is incorrect to state "there is no profit target in the funded trader rules." There IS a profit target, the target is simply the "cushion" you create within the first 10 days.

If you fail to create a profit cushion, then you cannot trade beyond the 10th day, since, by TST's own rules, you need to achieve an average NET P&L greater than $0 for each product traded, and that rule is enforced on the 10th trading day.

If you have no profit within the first 10 days, they you have no cushion to trade beyond the 11th day! And since you cannot trade back to a "zero" balance, then whatever profit you made within the first 10 days, BY LOGIC AND DEFAULT, becomes the cushion!

Sure, that "cushion" is not defined. It could be $100, it could be $1,000, or even $5,000.

The bottom line is this: those who fail to build an adequate cushion WITHIN THE FIRST 10 TRADING DAYS of the live account will not survive beyond the 11th day unless that cushion is large enough to keep trading and absorb losses, since, again, you CANNOT go back to a "zero" balance after the 11th day. Got it now?

Yes i understand now and i thank you for pointing this out. I had read the rules but failed to interpret them correctly. I don't believe this is such a biggie that you are making it out to be though and here is why (and all this assumes the trader has an edge and is proficient, of course we know most are not).

Days 11+ of funded will be conducted with a max loss of the profit (cushion) from Days 1-10 of funded. If a trader can pass a 10 day combine then they will likely have the skills to do the same in the days 1 - 10 of funded. TST is clearly testing ability to trade with real funds whilst continuing to follow strict rules a during days 1-10. Lets look at the example of someone who has passed a 150k combine and hit the 6% profit target. Lets say they did twice as badly during Days 1-10 of funded and made 3%. This means their cushion for days 11+ of funded is this 3% = $4500. This is a very similar situation to the initial combine but with no profit target. The trader can now trade conservatively to build up the cushion to something sensible - i previously mentioned a 10% figure as a guide.

Yes the scaling rules have to be followed. In the 150k account 3 contracts are permitted. Using the example of an instrument with $12.50 tick, 3 contracts and 20 tick stop, $750 per trade can be wagered which is 0.5% of the $150k account so perfectly viable to build a cushion in days 1-10 using the scaling plan.

 

[ScalperJoe]

I refer to the days 1-10 funded traded rules at https://topsteptrader.desk.com/customer/portal/articles/1950861-funded-trader-rules

it states that you must not breach your max daily/weekly loss or max trailing drawdown. its does not state what these figures are but I believe they will be the same parameters that were in your corresponding combine. i.e. 2% daily loss, 3% max trailing drawdown for the 150k 10 day combine.

It is very clear from this together with the scaling plan that they want you to trade very conservatively when you start as a funded trader for obvious reasons. A solid trader risking for example 0.5% (R) per trade in early stages of funding would need to make 20R risk to build a 10% account cushion. This would allow them to make meaningful amounts of profit am withdraw it.

It's good that I drank a lot of caffeine during my night out or there's no way I could write responses to your posts so late, lol.

"its does not state what these figures are but I believe they will be the same parameters that were in your corresponding combine."

NO! The figures are not quite the same parameters of the combine. And it DOES state what these figures are, they are clearly listed on TST's site. The live account has TWO rules which are not part of the 150k combine:

1. weekly loss limit (divide the weekly by 5 and that is your NEW daily loss limit).
2. scale up plan (max lot size applies and is scaled up ONLY when profits are added)

"It is very clear from this together with the scaling plan that they want you to trade very conservatively when you start as a funded trader for obvious reasons."

YES! So, what does that imply? Remember, you CANNOT go below the "zero" balance after the 10th day. This means you MUST have built up an adequate enough cushion during the first 10 days of the live account.

BUT WAIT A MINUTE! How can you build up a solid cushion if, in your own words, it is "very clear that they want you to trade conservatively when you start?"

Do you see the catch-22 here? The odds are LOWER to survive the live account if you are required to trade conservatively AND also build up a solid cushion within the first 10 days.

This is what has been discussed endlessly on this thread, and you finally got it, thank you.

Need to hit the rack, big pappa's day tomorrow, early breakfast. Enjoyed the discussion.

Best of luck.

 

[londonkid]

However, it's faulty logic to think a trader will never get into a jam. It's how they exit that jam that counts.

Of course traders get into 'jams' or drawdowns. Many jams though are caused by over leveraging in the first place. If traders risked 0.25% per trade then you have to be unlucky (not very unlucky but fairly unlucky) to hit a 3% trailing drawdown (limited to starting balance).

I agree with you it is how a trader copes with james or drawdowns that counts. If they treat each trade as separate and follow their process without over leveraging they should get out of the jam. In reality though most don't do that of course.

 

[londonkid]

I only provided my opinion regarding changing the daily loss intraday to EOD, and also added the caveat that the backer would NOT want to implement that rule in the live account!

Nothing would stop traders "scaling/averaging/martingale in until they are good for the EOD max loss." Actually, it's the daily max lot size that would stop the trader! It's not like a guy is going to continue adding 100 lots to b/e, lol.

again lets take an example 150k 10 day combine. 15 contracts max position.

trade risk is 0.5%, 20 ticks on a $12.50 contract 3 lot. capiche. if scaling/averaging/martingaling was permitted and only EOD daily loss considered (not intraday) then what is to stop the trader using the other 12 lots of firepower to try and make the trade good'. There is room to double down, triple down, quadruple down, quintuple down (is that a word lol). It would be abused and TST dont want that it's good for nobody in this process.

 

[londonkid]

First, to claim you are getting "the chance to trade $150k of their money" is flawed. Where are you getting this $150k number? Where does TST put up $150k?

TST is going to back you with the following capital:

1. The maintenance margin required to trade whatever product you choose based on the scale up plan, plus the maximum allowable drawdown which applies to the first 10 days of the account. Beyond the 10th day, they are providing the capital for the maintenance margin multiplied by the maximum allowable lot size for each product traded.

2. The increased maintenance margin required guided by the rules of the scale up plan. This amount of maintenance capital is in theory unlimited depending on the ability of the trader to continue trading and build up lot size. THIS in my opinion is the true value of the live account, since it does not require ANY capital outlay from the trader.

right lets address this and I am glad we are having this discussion. I don't know the inner workings of setting up a prop firm or sub prop firm but I do know that when you set up a they will ask you what you want to do and how much capital will you deposit.

the conversation might go like this: Hi Marex this is TST. I want to fund up to 200 traders and give them up to $150k buying power each, perhaps $100k average BP. Marex: ok TST. We can do that for you but you will need to put up $5m capital.

the idea that there isn't real money behind TSTs backing is wrong. I dont know the exact way they allocate capital from the funding partner to the individual trading accounts, I am guessing there are a number of ways to do it.

the idea that they are only putting up the intraday margin of $500 per contract is wrong, they have substantial capital and are allocating risk to each trader. I wish people would stop comparing what TST is doing to what would happen if you went to amp with $3000 and said juice me up, it's not the same at all for many reasons.

 

[londonkid]

"Going live and making a couple of k cushion in their account then even contemplating withdrawing is a piker mindset."

So if TST is the one saying you can take out profits at anytime, are you claiming they have a "piker" mindset?

my goodness lol. that is a ridiculous extension of what i said. dude, clearly TST say you can take profits out any time, they are removing any barriers to people joining, they want people to join anything they can do to make it attractive they will do that, thats why they say you can withdraw anytime. What I am saying is say you make $3k profit on a $150k account. To then withdraw $2k is piker because you are jeopardising your long term success by not keeping the money in there. Honestly if someone needs to take $2k out in the 1st 10 days to buy food/pay rent that is piker and they really should go and do some unskilled work to build savings.

 

[Pekelo]

I am sorry I didn't realise the time police were watching lol.

Sure we do, sure we do. Today it was only 2.5 hours, so you might be typing faster?

As about my 10K posts, those happened during 10 years, not in 3 hours , dude. And when you are waiting for your trade to play out, you have plenty of time to kill. But you are spending this much time on this topic over the WEEKEND.

Now about your crying about our criticism of TST: They came here advertising their services, basicly a job offer for any ET posters. Wouldn't you do due diligence of a company before you get hired by them? That is just plain common sense. So looking into their practices and misleading info are just the first step for anyone who is seriously thinking about working for them.

Since this is the weekend and it isn't raining here, I might get back to you on Monday. Or I might not, since I have already said everything what was to be said on the matter, but who knows, maybe I will be bored on Monday....

Homework assignment: If you care to explain why a losing trade duration vs. winning trade duration ratio is an important marker (as it was for TST for 2+ years), I am listening... And if it was so important that you could fail the Combine because of that marker, how come they don't have it anymore?

 

[Pekelo]

Hey, Londonkid, this is your lucky day! I have walked the dog and looks like going to rain here, so here we go:

the idea that they are only putting up the intraday margin of $500 per contract is wrong, they have substantial capital and are allocating risk to each trader.

Didn't you say earlier you don't know how their business really operates (you aren't an insider), so how can you be so sure? Not to mention all their rules prove that they DO only put up the intraday margins, so even logic is not behind your statement. And nothing is wrong with that practice if they are honest about it, although they can't back traders with much longer holding periods. (although I think they do exceptions)
But as a general rule, they mostly use intraday margins, period. It cuts down on the required capital and risk, so makes sense....

The accusing them not using real money argument hasn't been brought up for ages, so you are arguing a moot point again. And we aren't just criticizing them, I gave them plenty of good advices through the years, some of them they actually followed. Hey, I even told them how to make way more money by..... well, you just have to read my old posts....

 

[londonkid]

"its does not state what these figures are but I believe they will be the same parameters that were in your corresponding combine."

NO! The figures are not quite the same parameters of the combine. And it DOES state what these figures are, they are clearly listed on TST's site. The live account has TWO rules which are not part of the 150k combine:

1. weekly loss limit (divide the weekly by 5 and that is your NEW daily loss limit).
2. scale up plan (max lot size applies and is scaled up ONLY when profits are added)

ok you are saying it does state the that daily and weekly stop loss figures are during the live account. I have read the following many times and cannot see it https://topsteptrader.desk.com/customer/portal/topics/787382-funded-trader-info/articles?t=558735

I can see the scale up plan we have been discussing that. Where does it say your weekly loss limit and that you divide it by 5 to get your new daily loss limit. provide a link or screenshot, not just your thoughts which can be subjective.

I can clearly see there is a daily stop loss and trailing max drawdown. (2% & 3% respectively in the 150k combine). As no figure is mentioned it would seem reasonable that it is the very same 2% & 3% figures used in the combine. The way it reads is that the daily/weekly loss limit are the same i.e. 2% max loss per day and if you do that you are also done for the week.

please provide a link/screenshot if you have different figures for daily/weekly/maxtdrawdown.

"It is very clear from this together with the scaling plan that they want you to trade very conservatively when you start as a funded trader for obvious reasons."

Do you see the catch-22 here? The odds are LOWER to survive the live account if you are required to trade conservatively AND also build up a solid cushion within the first 10 days.

Catch 22? odds lower? I just dont get why you are highlighting this. Yes the odds are lower to survive the live account if you are required to trade conservatively AND also build up a solid cushion within the first 10 days THAN if you used a less strict set of rules. The odds are LOWER than what, all you are saying in reality is that the odds are low that a trader will succeed but we already know that.

Are you in some way saying that days 1-10 are a catch 22 and that is somehow unfair or that the rules should be changed to make them easier for you? otherwise i dont get your point. It just doesnt work like that. They make the rules and they are designed so only the best skilled traders make it though. They could say ok scalperjoe you can have 30 days instead of 10 days to build up your profit (which is then used as the cushion for next stage of live account). If they did this they would be accepting inferior traders, traders who cannot replicate what they did to pass the combine with the additional pressure of trading live funds. This is the crux of days 1 to 10 and what it is testing. i.e. can you repeat your combine performance or similar with live funds.

to go over this ad nauserum again we use the example of a trader who has just passed a 150k 10 day combine. even giving a huge margin of error by saying all they have to do is achieve half the performance at 3% instead of the 6% they achieved to pass the combine the figures are:

0.5% risk per trade. eg. 3 contracts, 20 tick stop on a $12.50 tick instrument
3% profit (half performance of combine) = $4500 profit
6% profit (same target as combine) = $9000 profit

so the trader has to simply replicate what he did in the combine again with live funds.

 

[londonkid]

When I claimed "YOUR" profit it's simply a way to differentiate between the 80% vs. the 20%. You are analyzing semantics here. Yes, you are trading the backer's account, just like when you trade with a licensed Series 56 firm, you are trading "FIRM CAPITAL" as part of an LLC agreement which you sign, and which you ALSO agree to a profit split that is clearly defined in that agreement. I'm sure the LLC agreement is very similar with TST/backer.

so essentially you agree with me. lol dude.