Can someone post an example of these black swan events ?
I include trader error in my broad definition of the term. Setting an incorrect stop level, not noticing it, getting a phone call and leaving the office without checking again, losing Internet connection without another means to correct it, family emergency without thinking of going to cash, those kinds of things can lead to a negative balance by the time the broker forces a liquidation.
Go on, don't let us hanging there....
Alright why not, we're between friends here.
The combination of signing a document I didn't fully understand (endorsing the company debt), with delivering on everything I had promised clients and suppliers culminated in shutting down my business, which took me down with it (bankruptcy). While I don't regret being a man of my word, it's been very costly. It's only been a year since I've lost all traces of the event on my credit records. Bankruptcy laws have since gotten much tougher, as well. So, I'm now strongly adverse to the remotest, minuscule non-zero risk of bankruptcy (i.e. owing 3x my savings to my broker tomorrow morning because I typed an extra zero to my stop level without noticing - let's say something big enough that a payment plan would be unbearable). Mind you I love trading so I'm not
entirely risk-adverse, but I don't look at rare bad luck thinking "it only happens to others", I plan for it if I can, and I'm at least aware of it if it's unavoidable.
But as you point out, there is no guarantee that the company itself won't have a blackswan event and your profits might never get a chance to be withdrawn.
That
is black swan protection: your risk is limited to whatever profits you hadn't yet withdrawn in this scenario. Limited risk, that's huge! You don't owe TST a single penny. I see a funded trader account balance there as unrealized profit until it's under my direct control.
giving away profits to TST year after year if you are in fact a successful trader
Good point: I see TST as a possible stepping stone, not a long-term solution. There comes a size (all liquid assets combined) where a complete f*ck-up wouldn't lead to net negative equity, in other words the equivalent of trading without leverage if accounting for everything and not just what's sitting with the broker.
All that being said I don't want to come off as a TST fanboy; I have yet to decide whether they'll get my business with their current rules. I'm thinking the time and expense of combines may be better invested looking into trading options.
