Topsteptrader

[londonkid]

Sure, the passing of the combine is the first and necessary step, but is not relevant in terms of taking a check. Ask any trader who passed the combine if that was their ultimate goal.

Your example of the 16 trades in the 150k combine using those r/r parameters works as long as you don't have four losing trades in a row, or you'd hit the max trailing draw.

As far as days 1-10 in the funded account, if you can maintain those parameters with 3 lots, and build size if needed using the scale up plan, without ever hitting the max draw, then sure, the math works.

It sounds like you have a good handle on how to pass the combine AND build a $4500 profit cushion in the first 10 days of the funded account. So when do you expect to start the 150k combine?

that is correct 4 losses in a row and you are toast. dont forget you can also devise your own scaling system. so for example you could trade 0.375% (R) risk to begin with in the combine. once you have made a 4R cushion you can use this to change up to 0.75% risk. this would give you 8 full stop outs. personally i dont fear stop outs.

When do i plan to start? I currently trade my own account but I am very interested in trading OPM. I may have news for you on this shortly.

 

[ScalperJoe]

The "risk" they are allocating to each trader is for the draw allowance within the first ten days of the live account. Remember, the backer does NOT have risk beyond the 10th day, since you have to build a cushion, and that cannot go below "zero" so in other words the backer will never have to face a margin/liquidation call for their maintenance equity.

Just for clarification, I am not aware of the actual specifics of the backer's account. I recently spoke to a trader who used to work the back office in a prop firm. He said if the backer has the "master" account and several traders, the backer could face possible maintenance risk.

A prop firm with several traders allocates buying power from one general pool, and thus would not have to provide the maintenance capital for each trader individually.

Regardless, the trader has no capital outlay in the live account in the Top Step model, and thus has basically no risk. The rare exceptions are cases where the backer's FCM goes bust while the trader maintains a cushion (e.g. MF Global), or if the backer is unable to allocate enough capital for their aggregate maintenance equity and has to voluntarily cease operations.

 

[londonkid]

I recently spoke to a trader who used to work the back office in a prop firm. He said if the backer has the "master" account and several traders, the backer could face possible maintenance risk.

A prop firm with several traders allocates buying power from one general pool, and thus would not have to provide the maintenance capital for each trader.

amen to that. Prop is all about custom margining. Its quite amusing that some posters are saying that Topstep has very little money at stake. Do they think that backers at other firms somehow allow you large losses.

Then there are the people who say Topstep is a scam as you can open an AMP account and keep 100% of the profits. The psychological benefit of knowing you have no downside is huge for the trader. If you posted up just the margins yourself you would have huge leverage and that would create psychological pressure.

 

[londonkid]

It sounds like you have a good handle on how to pass the combine AND build a $4500 profit cushion in the first 10 days of the funded account. So when do you expect to start the 150k combine?

I decided to start a 10 day $150k combine Monday of this week. 4 Days traded so far and I have already met the $9k profit objective with $10k profit to date. See metrics attached. I am happy with the 52% strike rate and 3.53 win/loss ratio over the 50 trades made so far. I had to modify my normal style to take more trades than i normally do, this was simply because I didn't want any variance to take me out. I am not going to 'bat out' the remaining 6 days as it's not in my psychology to do that. Will probably now have fun trading it out now I have a cushion. Of course the naysayers say its better to trade your own account. I have been trading my own account and the combine simultaneously, no reason you cant do both and that kind of negates that argument.

Personally I took the combine (my first) as I want to transition from trading my own account to trading OPM. I am planning to use all my trading with TST as a track record to negotiate a larger account size with them or another backer. The bigger picture for me is to trade a much larger account and TST could potentially offer that or serve as proving ground.

GT

 

[ScalperJoe]

I am planning to use all my trading with TST as a track record to negotiate a larger account size with them or another backer. The bigger picture for me is to trade a much larger account and TST could potentially offer that or serve as proving ground.

Nice going on the combine. Yes, the true value of the TST opportunity is on the back end, in order to trade size without any risk of capital, while also maintaining the ability to trade within a structured environment.

 

[londonkid]

Nice going on the combine. Yes, the true value of the TST opportunity is on the back end, in order to trade size without any risk of capital, while also maintaining the ability to trade within a structured environment.

Thanks and yes I agree. The opportunity to trade size in a structured environment is nicely put. For me the only reason to trade is to be able to make sufficient income/capital that would dwarf what one could achieve in a high end employed job or running a reliable business. Let's face it all of us are probably doing this to make enough money to hit their number. $1m, $5m, $50m whatever that number is to change our own/families lives and leave a legacy. To achieve these goals you need to trade size and do it solidly for a 3 to 10+ year period.

Yes TST earn money from people failing combines. You will hear of people taking 20+ combines and saying 'I am nearly there'. I have 'just turned the corner'. In reality their combine account is probably at best bobbing along around break even, up and down with the variance you would expect of a negative sum random walk. If they do manage to scrape through a combine they will likely later blow up due to lack of real edge. This need to continually take combines is explained by the hope and greed dynamic which is played out over and over again. The trader is hoping they will pass the combine when they should be doing the opposite. i.e. fearing losing their money. There is nothing to stop someone trading in demo for free until they are confident they will pass the combine but people will continue to donate. If you look closely enough this happens in nearly all other endeavours in life.

The psychology of trading in a structured environment with enforced risk management should not be underestimated. I wish I had learnt in that environment. I have friends who learned in genuine prop (not pay to play prop) and to be told on day 1 in no uncertain terms what your risk parameters were, stick to them or be fired is a great proving ground. The 'I'll make it back' thoughts are not even discussed in your head, hit your daily loss and you leave the office for the day, no ifs/buts. Compare this to the popular 'pay to play' prop firms where a trader has put up their own capital. Even a tap on the shoulder from a risk manager to say 'that's enough for the day' is often met with aggression/hostility as it's 'my money'. Daily risk limit breached? No problem put a call in to get it unlocked again. All reasons why enforced risk management of funded trading is beneficial.

Of course no amount of risk management will give you an edge. For me the best place to find an edge is to look at how and why the masses lose money. By definition the vast majority of methods discussed openly on trading forums/other media is likely to lose you money. This applies to the majority of advice handed out. Think about it. If you have a large pool of traders, the majority of whom lose money then you want to be looking at monetizing that. It's not as simple as taking the other side of a losing traders trade. Losing traders still get it right often enough to keep them playing and keep them coming through the casino doors.

GL.

 

[shiko2000]

I dont mind being an open book in regards to some things. But I will not talk money.

That being said -

Yes, I scaled up. My personal risk management plan allowed for 1 ES per every 1000 earned. And vice versa I scaled back on DD`s. They were more liberal I think. I could have sized faster. I chose slower.

General advice worth $.01usd =

Know the long term statistics for your approach. One Example - If you do not know what your avg MFE/MAE is but you know what your favorite sports team stats are then you are not giving 100% to trading. This was critical in taking me from scratch to profitable.

Bad news gurus. You dont know where the mkt is going. Ever. Dont let that frustrate you because nobody else does either. And if you profess otherwise you`re a liar. Dont lie to yourself. But the good news is you dont have to know wheres its going. Making money in trading is about managing the losers.

Which segues into my largest lesson learned...

My strength has always been my ability to stop out. I know where I am wrong. Then its done and over. Simple enough. But forever before and during some of TST I was a huge proponent of taking profit targets. 1/2 or 1/3 risk/reward minimums were typical. I have proven my own theory dead wrong via my own compiled real time stats. Putting a profit target on a winning trade is the absolute wrong thing to do when you have 6.5 hours to try and make money.

In the beginning I was using 3pnt stops/6pnt tgts. Then as my rolling stats moved I found I could tighten stops and set wider tgts and adjusted to 2/7 and get better results. However this was still too conservative. As it stands today my average winner in ES went on average .79 against me and 8 and change handles with me. And at least 25% of those winning trades went north of 10 handles and into the ether of mid teens+. And heres the kicker. Holding a winner from entry till the close of NYSE biz made the most sense for maximizing profit gained. Essentially making managing winners a non-event! My hit rate was only 37% for context.

I have been trading live since October 2001 with Worldco near the end of their demise. On and off again since then. But I never really truly appreciated the old cliche of "letting winners run" until recently. I have an amazingly hard head. Or perhaps the human instinct simply goes against all that is right in trading so hard, that changing that behavior if you are not born with those traits takes a long time...

Excellent post. I realize Crispy you are not posting here anymore, but i wonder, are you using trailing stops, move stop to BE or just leave trades running win or lose till the end of the day.
Instinctively I knew this too that leaving profitable trades running till the close might bring outlandish winners. The problem I see is what about not letting winner turn loser and frankly i have seen this many times reversals when say 10-16 points turn into BE.

 

[Pekelo]

Hey Londonkid, don't keep us hanging here, have you finished your Combine? The way how you started it was pretty impressive, you should be at the LTP by now...

 

[londonkid]

Hey Londonkid, don't keep us hanging here, have you finished your Combine? The way how you started it was pretty impressive, you should be at the LTP by now...

without appearing to be flippant the combine was comfortable. I don't know what LTP is? They asked me to complete the funded trader preparation (FTP), which I am fine with. 2 days into that and well on the way to hitting the target. For the FTP i have have a 3% profit target (half combine target), 60 day time limit, 2% daily loss, 2% weekly loss, 3% max trailing drawdown, 45%+ profitable days, flat on major data and have to follow funded trader scaling plan. GL

 

[Pekelo]

FTP and LTP are the same thing, we just call it (and they used to) Live Trader Prep....

Congrats, by the way. Since I like to predict, here it goes:

By mid-October, you will be done with TST for various reasons... Prove me wrong!