Some factors I would suggest thinking about include:
1. Realistically, how good are you at trading you own account now? By "trading," I mean live.
2. Again realistically, what size account can you manage, recognizing the need for a decent-sized cushion against loss?
3. Would having someone else initially put up the money make it an easier effort for you?
4. Would having someone else take the risk of actual loss of capital make it a better deal for you?
There may be others, but you see the point -- if you don't need the backing, and if you are already good enough (consistent enough and profitable enough), then why go with TST at all? Otherwise, maybe so.
Actually, I can see that a very good trader might want to trade with them anyway, on the assumption that he could quickly run up his account so he could be trading a good size, without ever risking his own money. (As you show more profitability, you can request more contracts to trade, so you're not stuck at your Combine level.)
So it's all a matter of your situation and your weighing of the benefits. There are people who use the TST funded account as a stepping-stone, first learning to trade in the Combine, then graduating to the funded account, then pulling out some profit and putting it into their own account, and going on from there.
There are also those who just say, why not use someone else's (free) money, and trade the same in both accounts, doubling the impact?
There are some who say they don't want to trade by the TST rules, a reasonable point if the rules don't fit your style.
There are many ways to parse it. It all depends on how it makes the most sense to you.
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Definitely did not intend to come across as know it all or a big talker. I am 100% a newb with MANY MANY things to learn, hence the dumb questions about if I should attempt a combine. I have plenty more dumb questions.
@ Rocksolid68 Re my $9k profit comment. It was a big IF I can make $9k, my tiny account could use the additional funds haha
I will keep pondering before I decide either way
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You said above: "There are also those who just say, why not use someone else's (free) money, and trade the same in both accounts, doubling the impact?"
Wonder about the free:
You have to pay to join the program.
How many people did apply,paid and started it and how many of those ever got funded? How many of the funded ever took withdraw profits?
I find the business model of TST fascinating.
I will estimate thousands of people paid for the "option" to be funded. The some (few? no-one really knows besides TST)) that did make it despite all the restrictions and the 2 levels of testing, the TST risk is limited to around $2000 a funded trader.
Therefore, for every funded trader that the company carries a 2K risk, they need less than 20 wanna be funded traders to be even. If the ration of signup for the system to a fully funded is 100:1 (I doubt it, as so many I know took it for more than once, so it maybe even 1000 fees paid ratio to 1 funded trader) I wish I would own it. I would care less for the profit splits with the trader (as they even offer the first 5K all to trader...) and just sell the chance to be funded again and again and again.
I love it.
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@rocksolid68 Exactly right Alex. What I am wondering is if folks believe they have "edge" in the markets and if the do believe it, what is it they would characterize as their edge.
As a NASDAQ market maker I had edge. I was "the book" I traded significant "paper" (retail flow) I participated within the professional community at a very high level. There was a shit ton of edge in all forms. Hell, the spread was often 1/2 or 3/8...huge edge.
As a "local" CBOE market maker, again tons of edge back in the day, multiple sources too.
As an off the floor retail time framer (day trader) there is only one viable source of edge...extremely subjective...my accumulated personal experience. By no means is mine "the best" or even good, compared to others that have deeper experience or are just smarter than I am.
That is to say as far as the retail directional speculator (which is not really "trading") that the concept of "edge" is fleeting...less and less demonstrable. So we develop these methodologies based on price action or a confluence of non co-linear technical indicators, we apply "rules" to some extent to govern our actions. I'm saying that none of this is actually "edge".
What do people believe is their trading edge and why do you think that?
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I sometimes break it down like this: There are pundits and there are players.
Pundits are guys that talk about it. Players are guys that do it.
In my mind the difference is abundantly clear. Yet I know many players, guys that are still killing it trading, that have switched over to the "bullshit game"...that is pundit side, by offering a product or service for sale.
I can't, nor do I try very hard to figure that out. I do not understand the notion that if I guy has a goose that lays golden eggs...why he would sell the goose or even tell you where he keeps it. I do not buy for a second the idea that a guy that makes, or can make, $10,000 before 10 am four days out of every five will stick around and field phone calls from you, or review your trades, or teach you his methods until the end of regular business hours in exchange for even $1,000 a month.
Think about it, if you are that guy. Ask yourself...under what circumstances would I do that which my counter party is offering to do.
Do some guys want to transfer knowledge, yes. Are most willing to do it as a charity, no.
Some of the pundits offer honest legitimate solutions, others have never done anything but sell a dream. What I'd use as a filter is: Has this pundit ever been or are they still actually a player? I'd tend to go with guys that are actually doing what you want them to coach you on and doing it at a very high level.
Last edited by wldman; October 16th, 2016 at 02:14 PM.
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But we're not talking about pundits or giving advice or teaching some trading method. We're talking about a prop shop that is offering to hire traders if they can pass a test of trading sim (the "Combine") to hit a certain total, while controlling losses. The Combine costs money, and, of course, being sim is not real trading. But there has been a big argument about the fact that they charge to take it. Their argument is that if it were totally free, no one would feel they had much at stake and it would just be meaningless. Some others think that it's a rip-off to charge for it. We're talking a few hundred bucks, tops ($150 - $375, depending on what you choose.)
Generally, people find it hard to pass it. Trading is not all that easy.
There are people who do, and those who don't. Alex, @rocksolid68, is one who took it and did. They took him on as a trader, after a number of attempts by him, and he did well enough trading their money to take his share of the profits out and go out and trade on his own, which he does now.
So, they do what they say: set you up with a funded account, with rules and risk management, and split any profits with you (80 to you, 20 to them.) They are prospecting for traders, and will stake them if they can show it's worth the risk to back them.
The argument is whether it's worth the cost of the Combine for the trader, especially if you don't pass it, and then keep trying. There's a legitimate argument about that.
But that's what @IzhakHaim and I are talking about. My point is only that a person should make his own risk/reward calculation and decide whether to go with it or not. It's either worth it or it's not, which is a personal decision.
And, I did say I would stop, so now I guess I ought to....
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I looked at it.
If you compare 30k and 150k combines:
30k: 1.5 drawdown, 1.5k profit target
150k: 4.5k drawdown, 9k profit target
Your drawdown is increased 300% percent, but your profit target is increased by 600%(!!).
Meaning that all things being equal, you now need to show much more profit for amount of risk. All of a sudden you need much stronger edge to pass combine.