Topsteptrader

[londonkid]

TST should have a sign: Canadians don't need to apply!

In today's edition of Personal Finance, we will take a look at the tax issue:



We also mentioned this often overlooked issue with Volente lately, so let's do the math:

1. Toronto Trader trades his own money, makes 100K before taxes. His cap. gain tax rate is 25%, so he takes home 75K to his family. He buys flowers to his wife, maybe a nice ring too.

2. Toronto Trader trades for TST and makes 100K before everything. TST takes its 20% cut so his income before taxes is 80K. He is in the 40% income bracket so after taxes he is left with 48K. No presents, not even flowers for the wife...

Let's compare it again for the slower people in the back rows:

Everything else being equal, if TT trades for himself he takes home 56% more as a Canadian... YMMV in other countries, but the same math applies to most countries....

The only guy, Crispy in this thread who has been with TST for an extended time (1.5 years) left them a few weeks after TST lowered their cut from 40% to 20% across the board. I found that curious. Now Crispy might have earned the lower rate earlier, but even an automatic low TST cut couldn't make him stay, after he crunched the numbers. It is possible the tax issue has nothing to do with Crispy leaving them, but I am sure he could have used the extra 20-30% income...

For starters it is a losers mentality to rubbish something because you have to pay too much tax. It's akin to saying I will not take that promotion because I have to pay more tax.

Secondly, I cant see any reason why TST could not pay into a personal service company (LTD, LLP in UK). This would be the general MO. I have emailed them to ask if it's possible.

Making conclusions about Crispy's involvement with TST is nonsense. Crispy clearly did not have a large enough edge to sustain himself at TST. It's completely ridiculous to base decisions based on one traders experience with TST.

Finally you say Crispy is the only one to post in the thread who has been with TST for an extended period. Why do you think this is? People who are funded long term have no business coming on this thread and duking it out with losing keyboard warriors, they have long since worked out that that is a losing strategy. If 10 traders posted in this thread and said they have been with TST for 1 year+ and made decent money do you honestly think this would stop the bitter losing majority from posting crap, not going to happen dude.

My sole motivation in posting and correcting some of the crap is trying to portray TST for what it really is. It is a genuine business which offers a valuable service to developing traders. A rule set and an accountable environment which if used wisely will aid development. 95%+ traders lose and a portion of these go rogue and vent on forums, that's just the way it is and it's unlikely to change.

 

[NoDoji]

I agree that those who adhere to the rules have better chances, however, that will greatly depend on the cushion a trader has built in the first 10 days.

In your opinion, what amount of a draw allowance per lot of ES or CL do you feel is adequate enough to meet that objective?

That depends on many factors, so I have no opinion on it.

 

[NoDoji]

1. Toronto Trader trades his own money, makes 100K before taxes. His cap. gain tax rate is 25%, so he takes home 75K to his family.

2. Toronto Trader trades for TST and makes 100K before everything. TST takes its 20% cut so his income before taxes is 80K. He is in the 40% income bracket so after taxes he is left with 48K.

Suppose Toronto Trader has a fairly small personal trading account and is so fearful of making a costly error or of a black swan event when trading his own account that he can't bring himself to trade more than one futures contract and barely manages to net 20K a year.

However, when the stress of his fears is relieved because he's trading someone else's capital and has nothing to lose except his status as a professional trader, he finds himself easily generating 100K a year.

Now what makes more sense, his personal 15K gain after low taxes or his professional $48K gain after profit share and higher taxes?

 

[ScalperJoe]

of course its lower odds to succeed if you have less of a cushion this is stating the obvious. Please don't accuse me of buying into sales pitches, I am fiercely anti-vendor and contrarian.

Of course it's obvious, so the concept of a "decent trader" scaling up with a one lot piker account that you previously mentioned is erroneous. It's the same sales pitch as the marketing pundits claiming you will make $200/day trading 1 lot of crude with a piker account. It has very low odds, it is very unlikely to happen. I never accused you of anything, I asked if you buy into the "make $200/day with a one lot piker account" system which you obviously don't, so I think we agree that the $1,500 total draw is not enough to survive in the TST live account.

The fact that people "reload" their accounts is moot, since you can't do that in the live account, you simply get sent back to the combine.

 

[ScalperJoe]

100's of funded traders yet none are putting up any decent numbers after 5 years of existence.
Why do you think that is ?
Where are all of these funded traders making a killing ?
If anyone was putting up any decent numbers you can bet your ass they would be using it for marketing.

I'll take a shot with those questions.

1. Some are putting up "decent numbers" as revealed by TST's own emails. As discussed repeatedly, the numbers will diminish quite rapidly if one hasn't built an adequate cushion and/or doesn't trade in accordance to risk, so they reach the max draw and get sent back to the combine. Compare it to a futures firm that signs up 100's of ES one lot margin accounts. How many will survive "after 5 years of existence?"

2. You can't have "funded traders making a killing" if those funded traders are limited by the constraints of a smaller max draw.

3. Sure, it makes sense to use it for marketing purposes, at least to reveal which traders DO put up the numbers, and to gain a sense of what combine they passed, and what cushion they built.

There is a strong likelihood of a direct correlation between the amount of cushion to the amount of "funded traders making a killing." Only the backer knows the specifics.

But does it really matter what someone else makes? Why would that determine one's reasoning to take the combine? TST has shown it's viable, so all the trader has to do is figure out a strategy with the highest odds of taking a check.

One strategy was already posted by londonkid. Pass the 150k combine by trading with the specified r/r mentioned, then trade with half risk in the first 10 days of the live account. All things being equal, you'll generate $4,500+ in gains, then on day 11 scale down risk again until you keep building up the cushion to take a check. You can then negotiate the daily max draw and increase lot size accordingly.

 

[ScalperJoe]

TST should have a sign: Canadians don't need to apply!

This isn't a foolproof program, and TST doesn't have the overriding authority on any country specific tax laws.

If a funded trader is making decent money after passing the combine, then it's a positive problem to have, and can be dealt with during that time. The Canadian trader can always go the IB route once they know they are profitable.

 

[londonkid]

You can't have "funded traders making a killing" if those funded traders are limited by the constraints of a smaller max draw.

after day 10 of funded there is no max drawdown rule just the simple max daily loss.

 

[Pekelo]

Suppose Toronto Trader has a fairly small personal trading account and is so fearful of making a costly error or of a black swan event

I think we already established that when he is trading for TST, he is going to have a small account. The starting account size is 3-7K with TST, and anyway if Toronto Trader is afraid to blow a 10K or even a 20K account on his own, then he is in the wrong business. And you can trade plenty of cars with 20K intraday...

None of the arguments for TST (OPM safety, big account etc) stands scrutiny... But thanks for playing...

-------------------------------------

Somebody mentioned this earlier in this thread, that they are just thinking now to increase the scaling up size beyond the stated. That would indicate that the most contracts allowed to trade right now maxes out at 20....(maybe a few traders allowed to go over that)

I am not sure how accurate that info is though. Instead of the number of traders passed I would like to know let's say the top 5 biggest traders' average max. contract size. (my guess is it is around 20-25 cars) That would indicate just how big account they are handling.

Michael is on record that nobody has made even low 6 figures yet, so their best trader's best year is probably 90K or even less. With 20 cars if you make 2 ES points per week, you make 100K per year.....So their best traders are either not handling big size or their average weekly profit points is incredibly low...

 

[Pekelo]

In tonight's edition of Where Are They Now?, we will take a look at what happened to Austinp, our friend who really tried hard to get a large account with TST last year. I think he failed to pass the Combine 2-3 times with his 30 years of trading experience (his words). Nothing shameful about it, the Combine isn't for every trading style. He isn't an active poster anymore, but luckily he has his own trading room and blog.

Quite accidentally, someone (not me) recently has asked him about TST, and it made him think:

http://coiledmarkets.com/blog/2015/07/17/combined-effort/

(Please note, he kind of forgot to mention his failed attempts in his response.)

The result of his thinking is a $100 for 2 weeks trading room where he is trying to pass the Combine using CL: (and there is still time for you to sign up!!!)

http://coiledmarkets.com/blog/2015/07/18/how-to-topsteptrader-combine/

I always thought TST was kind of genius, but Austin is an even bigger genius, since he found a way how to finance his Combine efforts and make REAL money, even if he fails it. That is some sort of Trump-kind business sense, I say...

Congrats to you Austin and Godspeed!

 

[londonkid]

Michael is on record that nobody has made even low 6 figures yet, so their best trader's best year is probably 90K or even less. With 20 cars if you make 2 ES points per week, you make 100K per year.....So their best traders are either not handling big size or their average weekly profit points is incredibly low...

In the interests of fact verification please post a link to where Michael is 'on record' as saying this.