That's awesome! I too don't have class till later in the afternoon everyday. I made sure that I could trade :P
@bobwest and I had a conversation about this very topic. He was very wise with his words. If he doesn't mind, I would love if he gave you the same advice he gave me.
That will never work in the real world. Realize that when you pull the trigger on a 15 lot you are already down $700-1000 in that moment- this is a hard reality to face but it's true. The idea of margin ability vs account size is ridiculous IMO for those who attempt to exploit it
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I don't want to pile on here, but I agree with @Inletcap.
I take @rocksolid68's point as simply: keep your risk of blowing out your account to a minimum by taking the largest available account, and then use way, way fewer contracts than you're allowed. You're just using the higher loss limits of the larger account to give you more leeway, but don'tload up on leverage. Use something like 2 contracts. (Which I think he says somewhere is about the size he used.) That lets you stay calm and trade without excessive risk, and succeed slowly.
Otherwise, the math will destroy you. At 15 contracts, 1 point in ES is worth $750. This is a fair amount of money to see evaporate due to nothing more than little twitches in price that don't mean anything. As an extreme example, we do see brokers who advertise less than $500 per contract day trade margin. That would let you have an account with less than $7500 in margin for 15 contracts. But a 1-point loss (-$750) would be 10% of the account; a 4-point loss would be $3,000, 40% of the account.
Even taking the max Combine size of 150,000, your 4-point loss of $3,000 is a big chunk of change. But with 2 contracts, it's $400. Much better.
There are practicality issues involved with using very large size, compared to your loss tolerance. Keep the size down. Leverage cuts two ways.
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Thanks for the replies and everything is taken on board.
I currently trade a small account so I am learning how damaging big swings can be.
I was not suggesting that someone should trade this way
More assessing if the combine will work for me. I have been reading reviews recently and quite a few reviews have mentioned that the possibility of extra size is not worth the effort. A few different reasons are given but include that with the max draw down you should not be trading 15 contracts anyway.
If I take the $150k combine so I can trade 2 or 3 contracts I am not sure I see much value. I will have to achieve $9k profit in sim mode which would be much better in my own account without the fees and rules. That $9k profit will give me enough bankroll to add another contract to my current size.
I was just giving my opinion since I have been down that same road.
You are looking at the 150k combine as a means of having future leverage. Don't. Do not worry about the 150k = 15 contracts. That shouldn't matter. Only the drawdown.
If you are able to churn out $9,000 in profit guaranteed, why are we having this conversation? The reason we are is because you CAN'T. Nobody can make $9,000 in profit guaranteed. So, since you can't do that for sure, you need to protect your downside. That is where the wiggle room of a $3,000 draw down comes into play.
I would be very interested in watching you do a $30k combine! Or watch you make $9,000 easily. Start a journal so we can follow your decision and see how it plays out!
What I am trying to say is that you are worrying about the upside potential. If that is what you are worried about, you already made it. Forget the combine and start a hedge fund. However, you are realistic and know that you will lose (and lose a lot if you have no edge), you want to give yourself the best odds of beating the combine, which is giving yourself enough room to lose and win without blowing it.
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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