There are clearly many successful traders who couldn't possibly pass a Combine simply because their trading methods aren't well suited to the Combine assessment requirements.
Also, one has to consider
the risk per trade as a percentage of equity in the account. There was some good banter between Pekelo and Maverick regarding this subject back in a thread from 2013.
TST's factors a value of $10,000 equity per lot size when determining the allowable daily stop amount in the combine. The $150k combine has a $3,000 daily stop, or 2%. However, the maximum allowable draw is only $4,500 or 3% of total "equity" in the account. In other words, even though they are allocating a 2% daily stop allotment, it's easy to "blow up" the account since you'd only have to be down 3% on the account size.
The same goes for the $100k. $2,000 daily stop is 2%, again, within reason for putting up 100k in your futures account. BUT...the max draw is $3,000, or 3%, yet the gain you need is $6,000, which is 6%. Let's say this was an equities firm, that allocated you a $100k equity account upon passing (forget about buying power, that is irrelevant when factoring risk).
Is it within reason to allocate a $2,000 stop out on a day trade if you have $100k in your account? The answer is of course "yes". BUT...if you are down $3,000, would you think it's reasonable to make a claim that you "blew up" the account? The answer is of course "no" unless you think losing 3% is an enormous amount as a percentage of total capital.
The same goes down the line for the 50k/30k/10k. If you factor $10,000 as a base value per lot traded, then you can see how the maximum lot size corresponds to each combine. Each combine has a 2%-3% total allocation of risk IF there was actual equity in the account. (The 10k actually allows for a 3% daily draw and a 10% total maximum draw, which is ironic since it is the smallest combine, but allows for the greatest risk a percentage of account size).
However, you must also calculate the maximum you can lose before a "blow up" in the account! Contrary to Endicott's own opinion, I don't think he's a "shitty" trader. He was able to pass the combine on the first attempt.
The problem is you cannot go "all guns blazing" in the combine, because the maximum allowable draw is too low as a percentage of total equity in the account.
There is very little margin for error, and thus very difficult, if not impossible, to trade out of a jam. The maximum allowable draw does NOT provide enough leeway to allow any savvy trader the ability to recover from a few bad days, even though TST's allocation of risk as a percentage of equity on
a daily stop is within reason.
So you are correct,
their trading methods aren't well suited to the Combine assessment requirements...because most traders know that losing 3% of your total equity is certainly no big deal, but it's considered a "blow up" of the combine metrics.
